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Clarification on Determination of Residential Status due to COVID-19  Pandemic

Clarification on Determination of Residential Status due to COVID-19  Pandemic


CBDT issued a circular today with respect to Clarification on Determination of Residential Status due to COVID-19  Pandemic as per Section 6 of The Income Tax Act, 1961. CBDT addressed the issue and excluded periods in different cases to determine the residential status


Section 6 of The Income Tax Act, 1961 contain provisions relating to the determination of residency of a person. The status of an individual, as to whether he is resident in India or non-resident or not ordinarily resident, inter-alia,  on the period for which the person in India during a previous year or years preceding the previous year. (Click here to read Section 6 of The Income Tax Act, 1961)

Various Representations have been received stating that 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 a non-resident or not ordinarily resident in India.

However, due to the declaration of the Lockdown and suspension of international flights owing to the outbreak of the Novel Corona Virus (COVID-19), they are required to prolong their stay in India.

Concerns have been expressed that this extra stay in India may make them a resident of India u/s 6 of The Act.


In order to avoid genuine hardship in such cases, the Board in the exercise of powers conferred u/s 119 of The Act. (Click here to read Section 119 of The Income Tax Act, 1961), ahs decided that for the purpose of determining the residential status u/s 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:

  • has been unable to leave India on or before 31st March 2020, his period of stay 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 after 1st March 2020 and has departed on an evacuation flight on or before 31st March 2020 or has been unable to leave India 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
  • 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.
Pic Credits:
Gourav Kapoor
Founder
CA Passion

Text source: original CBDT circular, click here to download

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