The Central Board of Direct Taxes (CBDT) has received many representations requesting for relaxation in the determination of residential status for the preceding year 2020-21 from people who had come on a take a look at to India through the preceding year 2019-20 and intended to leave India but could not do so due to the suspension of international flights. The matter has considering that been examined by CBDT.
In this context, CBDT has issued a circular exactly where it has been supplied that if any person is facing double taxation even right after taking into account the relief supplied by the relevant Double Taxation Avoidance Agreement (DTAA), he/she may perhaps furnish the specified data by 31st March, 2021. The data has to be submitted in Form –NR and is to be submitted electronically to the Principal Chief Commissioner of Income-tax (International Taxation).
Section 6 of the Income-tax Act, 1961 (the Act) consists of provisions relating to residency of a individual. The status of an person as to no matter if he is resident in India or a non-resident or not ordinarily resident, is dependent, inter-alia, on the period for which the individual is in India through a year.
Various representations have been received stating that there are a quantity of people who had come on a take a look at to India through the preceding year 2019-20 for a certain duration and intended to leave India just before the finish of the preceding year for keeping their status as a non-resident or not ordinary resident in India.
However, due to the declaration of the lockdown and suspension of international flights owing to the outbreak of Novel Corona Virus (COVID-19), they had to prolong their remain in India. Concerns had been expressed that they may perhaps involuntarily finish up becoming Indian residents with out any intention to do so.
In order to prevent genuine hardship in such circumstances, the CBDT has decided vide circular no 11 dated May 8, 2020, that for the purposes of figuring out the residential status below section 6 of the Act through the preceding year 2019-20 in respect of an person who has come to India on a take a look at just before 22nd March, 2020 and:
- has been unable to leave India on or just before 31st March 2020, his period of remain in India from 22nd March, 2020 to 31st March, 2020 shall not be taken into account or
- has been quarantined in India on account of Novel Corona Virus (Covid-19) on or right after 1st March, 2020 and has departed on an evacuation flight on or just before 31st March, 2020 or has been unable to leave India on or just before 31st March, 2020, his period of remain from the starting of his quarantine to his date of departure or 31st March, 2020, as the case may perhaps be, shall not be taken into account or
- has departed on an evacuation flight on or just before 31st March, 2020, his period of remain in India from 22nd March, 2020 to his date of departure shall not be taken into account.
CBDT had earlier informed that a circular excluding the period of remain of these people up to the date of normalisation of international flight operations, for determination of the residential status for the preceding year 2020-21 shall be issued right after the mentioned normalisation.