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Mar 09, 2026
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Tax residency during Iran-Israel conflict explained: Will extended stay in West Asia alter your tax status?
Geopolitical conflicts are usually analysed through the lens of diplomacy, security or energy markets. Yet, their ripple effects sometimes reach the everyday lives of ordinary individuals in unexpected ways. The ongoing tension involving the United States, Israel and Iran have periodically disrupted aviation routes across parts of West Asia. Major transit hubs such as Dubai and Abu Dhabi have experienced sudden airspace restrictions and flight cancellations, leaving many travellers stranded.
For Indians in the United Arab Emirates, including expatriates, professionals, and senior citizens from India visiting their children, such disruptions may initially seem little more than a travel inconvenience. However, in the realm of taxation, even a brief involuntary extension of stay can trigger consequences far beyond delayed flights. A deviation of just two or three days may alter a person's tax residency status, reshape compliance obligations, and potentially expose foreign income to taxation.
The explanation lies in the way our nation's tax system determines residential status.
The arithmetic
Under Section 6 of the Income Tax Act, residential status is determined primarily by the number of days spent in India during a financial year. The law lays down clear thresholds. An individual becomes a resident if they stay in India for 182 days or more during the year. Alternatively, residency may also arise if the individual stays in India for 60 days in that year and for 365 days or more during the four preceding financial years. These rules appear objective and straightforward. Under ordinary circumstances, they function smoothly. Yet, they are also rigid because the law counts days without examining the reasons behind them. This rigidity becomes evident when real-life travel disruptions collide with statutory thresholds.
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