The residency status of NIs who remained in India during shutdown has just been clarified by the government. The COVID-19 shutdown has altered lifestyles and brought organizations to a halt. Additionally, in the last few days, there have been a few notable modifications to authority. Section 6 of the Income-tax Act, 1961, which determines an individual’s residence status in India, has undergone modifications as of late. This statute has been modified to provide residential status to some non-resident Indians (NRIs) who have stayed in India during the coronavirus shutdown. 1. What does Section 6 of the Income Tax Act of 1961 contain? According to the income-tax laws of 1961, a person’s residence status depends on how many days he spent in India the previous year or the year before to it. Put simply, it means that someone who spent at least 182 days in India during the previous fiscal year would be recognized as an inhabitant of that country. Section 6 of the Act has posed a little problem for foreign nationals who have come to stay in India during the COVID-19 shutdown. 2. What problems are the visitors facing? According to the CBDT round on the matter, it is observed that: – Many individuals who had visited India during the previous fiscal year 2019–20 for an extended length of time either departed or intended to leave the country before the end of the fiscal year in order to maintain their status as non-resident Indians. In any event, international flights have been canceled, removing them from their previously planned itinerary items, due to the unusual coronavirus epidemic and the shutdown that quickly followed. According to section 6 of the legislation, some have expressed worries about this law since they are unsure of the processes and worry that they would be recognized as residents of India. 3. What modifications have been made to the Income Tax Act’s Section 6? The Central Board of Direct Taxes (CBDT) has made a modification to the demonstration in light of the aforementioned difficulty. In the event that an individual is unable to depart India by March 31, 2020, their period of stay in India from March 22 to March 31, 2020, will not be taken into consideration when determining their residential status. This concludes that individuals who arrived in India on a visit before March 22, 2020, will be eligible for certain legitimate rights. The same holds true for persons who were placed under quarantine in India because to the COVID-19 pandemic on or after March 1, 2020; they must have completed a clearing trip by March 31, 2020, at the latest, or they will not be permitted to depart India by March 31, 2020. The whole duration of this visit, from the earliest point of his isolation period to the date of his departure, will not be taken into account. The legislation takes into account those who have booked their departure before March 31, 2020, at the latest. Consequently, this will record the duration of his visit to India, starting on March 22, 2020, and ending on the day of his departure. Similarly, he will decide whether his income is taxable when completing his income tax return for the 2019–20 fiscal year. In addition, a notice about this has been released by the CBDT. This is unquestionably a very important modification to the income-tax legislation. The non-resident taxpayers who were previously confused about their residency status in India have benefited greatly from this. They’ve gotten a break in these difficult times thanks to this law’s change.
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