How do I setup an automation rule for the following scenario?
When an issue moves from status of "backlog" to "ready for work", then the backlog tag should transition from "new" to "ready for board".
Whar do you mean with "backlog tags" exactly? I don't think this is something that exist by default.
Is this a custom field or are you using regular Jira labels for that?
With Automation you can use the issue transitioned trigger and as an action you could use edit issue action and edit whatever you want on the issue.
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