INDIA Trends and Developments Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
domestic statutory tests as the first and determinative threshold. Given that the Indian tax authorities, who had pre- viously adopted a more liberal interpretation of the residency rules, have now begun to scrutinise returns more closely and reassess the tax liability of taxpayers who frequently travel, taxpayers, including NRIs, who travel frequently and not solely for employment pur- poses – must plan their travel in alignment with both domestic residency rules and applicable tax treaty provisions. Consequently, what may once have been perceived as a mechanical exercise in day counting is increasingly becoming an inquiry into behavioural patterns and economic alignment. It is now observed that merely relocating one’s family or securing foreign employment is insufficient when material financial or economic ties continue to remain anchored in India. Tax authorities have begun applying a more holistic lens – scrutinis- ing immovable property, investment footprints, intra family financial transactions, and, critically, the sub- stance of foreign employment arrangements. Where the commercial focus of the foreign employer remains India-centric, authorities may be inclined to conclude that the individual’s economic centre of gravity is still situated in India, irrespective of the employer’s place of incorporation. While this ruling may continue through appellate channels, it nonetheless aligns with a broader trend of intensified scrutiny in similar cases. As a result, resi- dential status planning can no longer be a last-minute exercise tied to year-end travel calendars. Instead, now successful claims of non-resident status will demand a long-term, demonstrable establishment of foreign residence, supported by consistent conduct and credible evidence of a genuine shift of both per- sonal and economic interests outside India. Revamp of Nomination and Transmission Norms India is experiencing a shift in regulatory nuances with processes easing up to foster speed and sim- plicity when it comes to transmission of estates. Some recent reforms in the applicable nomination guidelines, listed below can affect how private clients plan their estate, nominate beneficiaries and transfer
assets. These rules bring various simplifications such as reduction of the necessary paperwork, mandatory nominations for single holders, increase of permissible limit of nominees and fixed timeline for settlement of claims. • Banking Laws (Amendment) Act, 2025 (March 2025) – effective from 1 November 2025, bank account holders can now nominate up to four peo- ple for bank accounts, fixed deposits and recurring deposits, with options for successive or simultane- ous nomination and specified allocation percent- ages. • Claim settlement – the Reserve Bank of India issued directions mandating a 15-day settlement timeline, eliminating legal document requirements for nominee/survivor cases regardless of amount, and established compensation frameworks for delay in release of payments. These directions also set nation-wide thresholds for releasing payments in the absence of nominations (as opposed to previous limits which were set by each individual bank). The forecasted implementation date of these revised norms is 31 March 2026. • Securities and Exchange Board of India (SEBI) – Nomination Reforms (January 2025) – SEBI’s circular, effective from 1 March 2025, increases the maximum nominees from three to ten for mutual funds and demat accounts, mandates nomination for single holders, clarifies trustee role of nominees, and simplifies documentation with the elimination of affidavits, indemnities, undertakings, attestations or notarisations, as earlier required. • Gifting of non-demat mutual funds – in Decem- ber 2025, SEBI simplified gifting and inheritance of non-dematerialised mutual funds significantly, allowing investors to directly transfer such mutual fund units without the cumbersome process of selling and re-investing, which previously triggered capital gains and costs. Greater Desire to Go Global: The Private Client Imperative Indian businesses demonstrated strong global expan- sion momentum in 2025, with Overseas Direct Invest- ment (ODI) reaching USD24.7 billion between April and September 2025, a ~17% increase over 2024. Singapore, the United States and Mauritius emerged
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