Sight of Relief for NRI !!
In an era of Pandemic, NRI and Foreigners visiting India had a sign of relief after the Central Board of Taxes issued Circular on Section 6 of Income Tax Act relating to Residential Status due to forced stay in India due to lockdown. Upon receipt of representations and as well as considering guidance of OECD model the circular was issued which is applicable for FY 2019-20.
For persons who came to India before March 22, 2020 the period of stay from March 22 to March 31, 2020, will not be taken into account for determine number of days of stay in India.
For person who have been quarantined In India due to Covid 19 on or after 1st March 2020, have either not been able to leave India prior to March 31, 2020, or were able to leave on an evacuation flight such period of stay in India will not be considered.
For NRIs, the test of residence is minimum 182 days stay in India during previous year while having stayed in India for atleast 365 days during the four previous years preceding financial year.
The taxability of income depends on whether he was resident of India or not. In short if he is resident then global income is taxable and if not then only Indian income is taxable.
Covid 19 resulted in lockdown and thus who had intention of catching a flight before completing 182 days couldn’t catch the flight due to cancellation of flights. Thus, the NRI got relief by the CBDT circular and now depending upon the residential status of a person as on 21st March 2020 would be considered for determining the residential status.
CA Shubham Chhajed
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