Relief for NRIs: Lockdown period won't count for tax purposes

Indian Finance minister Nirmala Sitharaman on Friday allowed discounting of prolonged stay period in the country for determining the residency status for Non Resident Indians (NRIs).

The latest circular issued by the Central Board of Direct Taxes (CBDT) said it would exclude the period of stay of such people up to the date of normalisation of international flight operations and their departures from India, while determining the residency status.

Recommended For You

Karan Johar over the moon as Martin Scorsese hosts Neeraj Ghaywan's 'Homebound'

Oman extends residency card validity to 10 years under new decision

FTSE 100 closes at record high on rate cut bets; AstraZeneca shines

UAE weather: Light rain expected in some areas; low of 23ºC in Dubai

Tranquil Developers launches Blossom76 in JVC

 

The board's decision will provide relief to people who may have technically become residents as per income tax rules due to travel restrictions and are expected to pay their global income to tax.

Dixit Jain, managing director, The Tax Experts DMCC, said: "The latest circular has come as massive relaxation to NRIs who went to India and stuck due to the Covid-19 situation.

Lot of NRIs plan their trip to India in such ways where they don't exceed 182 days to become resident in India, therefore this will help lot of NRIs as now they will be able to exclude these days and may be able to safeguard themselves from being Resident."

The board's decision comes after it considered various representations received from people who had to prolong their stay in India due to the lockdown and suspension of international flights.

They had expressed concerns that they would be required to file tax returns as Indian residents under Section 6 of the Income-Tax Act, the CBDT said in a statement. For FY 2019-2020, the board will discount the days from March 22, when international flights were suspended, till March 31 where an individual had not been able to leave India.

In case where an individual who has been quarantined in India on or after March 1, and has departed on an evacuation flight on or before March 31, or has been unable to leave India, the period of stay from the beginning of quarantine to the date of departure, or March 31, shall not be taken into account.

 In case where an individual has departed on an evacuation flight on or before March 31, his period of stay in India from March 22 till the date of departure shall not be taken into account. - sandhya@khaleejtimes.com