The government of India announced relief to those who have been facing difficulty with the status of their residency in India under section 6 of the Income Tax Act, 1961 due to lockdown and suspension of international flights owing to the Covid-19 outbreak, as they were required to prolong their stay in India.
There were various representations received from people who had to prolong their stay in the country due to the lockdown and suspension of international flights, expressing concerns that they will be required to file tax returns as Indian residents. Considering these, Union finance minister Nirmala Sitharaman allowed discounting of the prolonged stay period in India for the purpose of determining residency status.
The finance ministry further said that as the lockdown continues during the financial year 2020-21 and it is not yet clear as to when international flight operations would resume, a circular excluding the period of stay of these individuals up to the date of normalisation of international flight operations for determination of the residential status for the financial year 2020-21 shall be issued after the flight are resumed. The Central Board of Direct Taxes (CBDT) issued a circular detailing the relief.
There are a number of individuals who had come on a visit to India during the previous year 2019-20 for a particular duration and intended to leave India before the end of the previous year for maintaining their status as non-resident or not ordinary resident in India.
