Hello Radha,

The taxation of individuals under the Indian Income-tax Act 1961 ('Act') depends on the 'Residential status' of the individuals and the place of accrual/ receipt of the income.

Accordingly, the determination of Residential status is of utmost importance.

An individual is considered to be a Resident of India if he/she is:

a) physically present in India for 182 days or more in that tax year; OR

b) physically present in India for 60 days in that tax year and 365 days or more in the preceding four tax years. However, if an Indian citizen leaves India during the previous year for the purpose of employment outside India or as a member of the crew of Indian ship, the period of '60 days' is extended to '182 days'.

The above two conditions are termed as the basic conditions of residency. If neither of these two basic conditions are satisfied, the individual is classified as a "Non Resident" in India.

Now next thing to look is "for the purpose of employment outside India". A person who is deputed to overseas branch of Indian Company or who is seconded to overseas subsidiary can take the benefit of extended days to 182 in condition (b) above.

If an individual qualifies as a Resident, he would be liable to tax in India on his worldwide income.

Keep in mind , if you stay for less then 182 outside India in a particular tax year due to poor date planning you might get hit by double texation. Hence If you go for 2 year assignemt overseas in month of december that means you will be considered Resident Indian for that particular year therefore will have to pay tax on worldwide income, at the same time you will have to pay tax on source in that particular country.

Some of double taxation can be avoided due to treaty between Indian and some countries.