Stranded NRIs Get Income Tax Residency Status Relief Amid Lockdown

On Friday, the Income Tax Department informed that for NRIs/foreign visitors whose stay in India was prolonged due to lockdown, the prolonged stay would not be considered for residential status calculations for income tax purposes for the financial year 2019-20.

The CBDT (Central Board of Direct Taxes) issued a circular on Friday said that concerns were raised that individuals who had come on a visit to India during the previous financial year 2019-20 for a particular duration with intentions to leave before the end of the year to maintain their status as a non-resident would be considered as "resident" for income tax purposes under section 6 of the Income Tax Act.

The circular said:

"In order to avoid genuine hardships in such cases, the Board, in exercise of powers conferred under section 119 of the Act, has decided that for the purpose 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:
(a) has been unable to leave India on or before 31 March 2020, his period of stay in India from 22nd March, 2020 to 31st March, 2020 shall not be taken into account; or
(b) has been quarantined in India on account of Novel Coronavirus (COVID-19) on or after 1st March 2020 and departed on an evacuation flight on or before 31 March 2020 or has been unable to leave Indian on or before 31st March, 2020, his period of stay from the beginning of his quarantine to his date of departure or 31st March, 2020, as the case may be, shall not be taken into account; or
(c) has departed on an evacuation flight on or before 31st March, 2020, his period of stay in India from 22nd March, 2020, to his date of departure shall not be taken into account."

"Further, Circular for determining the residential status in such cases for Financial Year 2020-21 would be issued in due course, depending upon normalisation of/ resumption of international flights," CBDT added in a tweet.