New Delhi, May 22 -- Many taxpayers may think that citizenship alone determines where and how they are taxed but that is not entirely true. Under Indian income tax laws, a person's residential status often plays a bigger role in deciding tax liability than their nationality or passport status.

As a result, non-resident Indians (NRIs) and foreign citizens staying in India for long periods may be subjected to taxation depending on the number of days spent in the country and the nature of their income. Understanding this distinction is important because residential status determines whether only Indian income is taxable or whether income earned outside India may also be subject to Indian tax.

The Indian income tax law is based solely on re...