What tax residency actually means for an individual
Launch library · evergreen read
Tax residency determines which country has the primary right to tax a person's income, and it is a separate concept from citizenship, immigration status or where someone considers home. A person can hold citizenship of one country while being treated as a tax resident of another, based on factors such as how many days they spend there and where their economic ties are concentrated.
Most countries, including Australia and India, use a combination of physical presence tests and connection based factors, such as the location of a permanent home, family ties or the centre of a person's economic and personal life, to determine residency status for a given tax year. Because these tests focus on facts and circumstances, residency status is generally assessed year by year rather than fixed permanently.
It is entirely possible, though it can create complexity, for a person to be considered a tax resident of more than one country within the same period under each country's own domestic rules. This is precisely the kind of situation that broader frameworks like double taxation agreements are designed to help resolve, rather than leaving individuals to navigate overlapping claims unaided.