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Airspace disruptions can impact tax status of Indian travellers, experts say
Tax residency is determined by the number of days an individual spends in India during a financial year. A person becomes a resident if they stay for 182 days or more in a financial year
- PUBLISHED: Thu 12 Mar 2026, 7:06 PM
Indians travelling between the UAE and India amid aviation disruptions in the region may face an unexpected tax complication: A change in their tax residency status.
Tax experts say even a brief delay caused by flight cancellations or airspace restrictions could push travellers across the day-count thresholds used to determine tax residency under Indian law.
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Under Section 6 of India’s Income Tax Act, tax residency is determined primarily by the number of days an individual spends in India during a financial year. A person becomes a resident if they stay in India for 182 days or more in a financial year, or if they spend 60 days in the current year and 365 days or more during the preceding four financial years.
“Taxpayers need to closely monitor their duration of physical presence because tax laws generally do not make exceptions for such situations,” said Nirav Shah, director at Fame Advisory in Dubai.
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“For instance, someone who needs to keep their stay in India below the tax residency threshold may suddenly find it difficult to leave because of airspace disruptions,” Shah said. “In such cases, they may even need to travel to another country temporarily to avoid exceeding the permitted limits.”
The issue is especially relevant for non-resident Indians (NRIs) and professionals working in the Gulf who frequently travel home.
Sandeep Saxena, a chartered accountant with clients in the UAE and India, said travellers should build some margin into their travel plans.
“They should keep a buffer in their travel plans and carefully document any flight disruptions that extend their stay in India,” Saxena said.
“Where possible, they may also consider travelling to another jurisdiction if flights are available to avoid crossing the residency thresholds.”
Saxena added that even if a person is treated as a tax resident in both countries, the India–UAE Double Taxation Avoidance Agreement (DTAA) contains tie-breaker rules that determine the final residency. Under these provisions, individuals may still be treated as UAE tax residents if their permanent home, employment and main economic interests are based in the Emirates.
Lessons from Covid
Tax professionals note that similar concerns emerged during the Covid-19 pandemic, when international travel restrictions left many individuals stranded in India.
Shahzeb Khan, a Dubai-based chartered accountant, said authorities had recognised the difficulties faced by taxpayers in such situations.
“Under Section 6 of the Income-tax Act, an individual may technically qualify as a resident if the prescribed day-count conditions are met during a financial year,” Khan said.
“However, where the extended stay arises due to circumstances beyond the individual’s control, such as travel disruptions, war or other extraordinary situations, tax authorities and courts have recognised the need for a practical and equitable approach.”
During the pandemic, India’s Central Board of Direct Taxes (CBDT) issued clarifications allowing relief in certain cases where individuals were unable to leave the country because of travel restrictions
However, experts caution that similar relief may not automatically apply in the current situation.
“The government granted concessions for extended stays from a tax perspective during Covid,” Shah said. “At present, since travel is still possible in most cases, such concessions may not necessarily be forthcoming.”