When GST was implemented in 2017, the Central government committed to compensating states for any loss of revenue arising from the transition to the new tax regime for a period of five years, paid on a bimonthly basis.

The status of 'Resident but Not Ordinarily Resident' (RNOR) is a specific category applicable only to individuals and Hindu Undivided Families (HUFs) under tax laws. Other entities such as companies, firms, or associations of persons are classified strictly as either 'Resident' or 'Non-Resident' based on the location of their control and management, as they do not possess the personal characteristics required to satisfy the 'ordinarily resident' criteria.

Residential status is determined based on the number of days an individual spends in a country during a specific financial year. Since an individual's travel and stay patterns can vary annually, their residential status (Resident or Non-Resident) can change from year to year based on these physical presence tests.

Residential status is determined annually based on physical presence in India, meaning it can change from one assessment year to another. Furthermore, a person can be a tax resident in multiple countries simultaneously depending on the domestic laws of those nations and any applicable Double Taxation Avoidance Agreements (DTAA).

The incidence of taxation, or the scope of total income, is determined by the residential status of the assessee in India. An individual's tax liability depends on whether they are a Resident and Ordinarily Resident, Resident but Not Ordinarily Resident, or a Non-Resident, regardless of their citizenship, age, or gender.

The source rule of taxation establishes that income should be taxed in the country where the economic activity occurs or where the income is generated (the source). This is distinct from the residence rule, which grants taxing rights to the country where the taxpayer resides. Most international tax systems use a combination of both source and residence principles to determine tax liability.

The OECD identifies tax havens based on several key indicators, including low or zero tax rates, a lack of transparency in legislative or administrative practices, and the refusal to exchange information with other tax authorities. These factors collectively facilitate tax avoidance and evasion by non-residents.

Tax evasion involves illegal activities like concealing income to avoid tax, which is widely viewed as unethical. Conversely, tax planning is a legitimate practice that can be applied to both short-term financial decisions and long-term wealth management. Therefore, all three statements are correct in the context of fiscal policy and business ethics.

The Finance Act amended the residency rules. For an Indian citizen or person of Indian origin visiting India, the period of stay is generally 182 days to qualify as a resident. While there were specific relaxations for those leaving for employment, the standard threshold for residency remains 182 days in the relevant financial year, subject to the specific conditions of the residency test.

Under the Income Tax Act, if the provisions of a DTAA are more beneficial to the taxpayer than the provisions of the domestic Income Tax Act, the taxpayer is entitled to choose the more beneficial provision. This ensures that the taxpayer is not unfairly burdened by domestic law when an international treaty offers a more favorable tax treatment.