Clarification in Respect of Tax residency of Individuals

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Jun 30, 2020

Clarification in Respect of Tax residency of Individuals

The CBDT has issued a Circular^[1] relaxing the tax residency rules for individuals stranded in India on account of the COVID-19 pandemic:

i. FY 2019-20: For determining tax residential status for FY 2019-20 in respect of an individual who came to India on a visit before March 22, 2020 and: (a) has been unable to leave India on or before March 31, 2020 or has departed on an evacuation flight on or before March 31, 2020, his/her period of stay in India from March 22, 2020 to March 31, 2020 / date of departure, will be excluded; or (b) has been quarantined in India on account of COVID-19 on or after March 1, 2020 and has departed on an evacuation flight on or before March 31, 2020 or has been unable to leave India on or before March 31, 2020, his/her period of stay from the beginning of his quarantine to March 31, 2020 / date of departure, will be excluded; and

ii. FY 2020-21: As the lockdown continues during FY 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 FY 2020-21 will be issued after the normalisation.

[1] CBDT Circular 11 of 2020 dated May 08, 2020.

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