New Delhi: In a major relief to those non-resident Indians who have been stuck in the country due to lockdown, the finance ministry announced that their prolonged period of stay in India due to lockdown would not be counted while determining their residency in the country as per the provisions of section 6 of the Income Tax Act.
“Considering various representations received from people who had to prolong their stay in India due to lockdown and suspension of international flights, the Finance Minister Nirmala Sitharaman today allowed discounting of prolonged stay period in India for the purpose of determining residency status,” said the ministry of finance in a statement.
The board said the stuck non-resident Indians have expressed concerns that they will be required to file tax returns as Indian residents as they could not leave the country due to the lockdown measures.
“The lockdown continues in the financial year 2020-21 and it is not yet clear when the international flights would resume the operation,” said the ministry.
The ministry said the final circular for determining the residency of these individuals by excluding the period of extended stay would be issued after the flights are resumed.
“In order to avoid genuine hardship in such cases, the CBDT has decided that for the purposes of determining the residential status under section 6 of the Act during the previous year 2019-20 in respect of an individual who has come to India on a visit before 22nd March, 2020 and has been unable to leave the country on or before March 31, 2020 shall not be taken into account,” the Board said in the circular.
The circular said their period of stay between March 22 and March 31 shall not be taken into account for determination of their residency status.
It also said that if a person has departed from the country on an evacuation flight on or before March 31, 2020 then his period of stay from March 22, 2020 to his date of departure shall not be taken into account.
A large number of individuals, who had come to the country during the previous year 2019-20 and had plans to leave the country during the previous financial year for maintaining their status as non-resident or not-ordinarily resident in India, have been stuck in the country due to lockdown measures.
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The status of an individual whether he is resident in India or a non-resident or not ordinarily resident, is dependent, inter-alia, on the period for which the person is in India during a year.
(Article by Krishnanand Tripathi)
