Foreign nationals and NRIs stuck in India to submit details of double taxation by March 31
NRIs and foreign nationals stuck in India because of the pandemic and facing double taxation can submit their details to the income tax department by the end of this month.
The Central Board of Direct taxes (CBDT) has received various representations requesting for the relaxation in the determination of residential status for 2020-21 from individuals who had come on a visit to India during 2019-20 and intended to leave India but could not do so because of the suspension of international flights.
In a circular, the CBDT said if individuals were facing double taxation even after taking into account the relief provided by the Double Taxation Avoidance Agreement (DTAA), they may furnish the specified information electronically by March 31, to the Principal Chief Commissioner of Income-tax (International Taxation).
The details have to be submitted in a specified form.
Commercial international flights were suspended when the nationwide lockdown was imposed on March 25, 2020. Later, such flights were allowed in a restricted manner under bilateral agreements and the services are yet to resume fully. As a result, many NRIs and foreign nationals had to prolong their stay in India. There were apprehensions that this extended stay could lead to these individuals becoming Indian residents as per Section 6 of the Income Tax Act for taxation purposes.
For 2019-20 fiscal, which ended on March 31, 2020, the ministry in May clarified that the period of stay of non-resident Indians and foreign nationals in India during the lockdown period would not be counted for the purpose of determining their residency status for the purpose of taxation.