The recent escalation of conflict in West Asia has forced thousands of Non-Resident Indians (NRIs) to return home. While evacuation efforts have brought many to safety, tax experts are warning of a major financial complication. Individuals staying in India due to flight disruptions or safety concerns may face taxes on their global earnings if they cross the legal residency time limits.
When does an NRI become a tax resident in India?
Under the Income Tax Act, an individual’s tax status changes based on the number of days spent in India during a financial year. If an NRI stays in the country for 182 days or more, they are officially classified as a Resident.
For Indian citizens or Persons of Indian Origin (PIOs) who have an Indian-sourced income of more than ₹15 lakh, this limit drops down to just 120 days.
Once an individual becomes a Resident and Ordinarily Resident (ROR), their entire global income becomes taxable in India. This includes foreign salary, rental income from properties abroad, and international investments.
Tax consultants are warning that NRIs working remotely for their foreign employers while stuck in India could accidentally trigger a Permanent Establishment risk. This situation could legally make their foreign companies liable to pay corporate tax in India.
Are there any relief measures for war-displaced NRIs?
Following the Ministry of External Affairs issuing a Red Alert for Iran and Lebanon, over 57,000 Indians have been safely evacuated since late February 2026. Due to severe flight delays in major hubs like Dubai and Bahrain, many expats are still stuck in transit or in India.
Currently, the Central Board of Direct Taxes (CBDT) is counting these extra days toward the residency status. There is no special tax exemption announced yet for those forced to stay back, unlike the relief given during the 2020 COVID-19 pandemic.
The government has recently introduced the FAST-DS 2026 amnesty scheme. This allows returning NRIs to disclose hidden foreign assets up to ₹1 crore with limited penalties, protecting them from the strict rules of the Black Money Act.
Legal experts continue to lobby for a specific relief window. With the current financial year ending on March 31, 2026, many displaced workers risk exceeding their allowed day limits soon.
