| Question And Answer | |
|---|---|
| Subject: | residential status due to covid 19 restrictions |
| Category: | Income-Tax |
| Querist: | seetharaman |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Covid -19, Non- Resident, non-resident taxation |
| Date: | December 27, 2021 |
Respected sir,
Due to Covid-19 measures in Country X and India including lack of flights, I have not been able to resume my job in Country X and have been in India during the PY 2020-2021 for the period April 2020 to October 2020.
I came to India in March 2020 and was to re-join duty in Country X in April 2020. Due to the suspension of international flights from India (and into Country X), I was unable to join duty in Country X.
CBDT vide Circular No 11/2020 had clarified that for the purpose of determining the residency under Section 6 of the Income Tax Act, the involuntary stay in India from 22 March 2020 to 31 March 2020 will not count towards determining residence for 2019-2020. Assessee will remain a non-resident for income tax purposes for the financial year 2019-20, despite exceeding the 182-day stay. While this was for the AY 2020-21, a circular along similar lines was expected for AY 2021-22 also. The Ministry of Finance had also clarified that for the FY 2020-21, a circular excluding the period of stay up to the date of normalisation of international flight operations shall be issued. PIB release No 1622386 is also attached with the Circular No 11/2020 for reference. Till date, international flights to Country X have not been normalised to pre-covid levels and are a mixture of Vande Bharat and VTL schedules.
Further to the trail, I have submitted a request for relief along with the required particulars in Form NR as required per Circular No 2/2021. I have been treated as Resident in Country X for the purposes of tax in 2020.
I have requested CBDT to kindly issue directions to the effect that the period from April 2020 to 23 October 2020, being the time during which I was forced to stay in India due to reasons beyond my control, be excluded in computing the period of my stay in India during PY 2020-21 relevant to AY 2021-22. This is in line with the Circular No 11/2020.
In view of the above, and the impending deadline for filing tax return, how should I be filing my Indian Income tax returns for the PY 2020-21 (Assessment Year 2021-22) as resident or non resident?
please advice.
CBDT Circular No. 2 of 2021 dated March 03, 2021 has been issued in furtherance to the press release dated May 09, 2020.
Provided the other conditions therein are satisfied, assuming the assessee is a person of Indian Origin may become resident in India only in one of the following situations: (i) if his total income from Indian sources (i.e., other than the income from foreign sources) does not exceed fifteen lakh rupees in PY 2020-21 and he stays in India for 182 days or more during the PY 2020-21; or
(ii) if his total income from Indian sources (i.e., other than the income from foreign sources) exceed fifteen lakh rupees in PY 2020-21 and (a) he stays during PY 2020-21 for 182 days or more; or (b) he stays during the PY 2020-21 for 120. days or more and also stays for 365 days or more in preceding four previous years.
Therefore, the return should be filed in accordance with the conditions prescribed in this Circular.