Confused about residency status while stuck in India due to lockdown? Here is your answer

Individuals who have come to India on a visit before 22 March 2020 and have been unable to leave India on or before 31 March 2020, should know this important information. The Central Board of Direct Taxes (CBDT) has issued a clarification on the residency status of people with regards to their stay in India. The clarification come in the wake on representations made to the department stating that there are a number of individuals who had come on a visit to India during the financial year 2019-20 (April-March) for a particular duration and intended to leave the country before the end of the previous year to maintain their status as “Non-resident or not ordinary resident of India”.

The individuals have been forced to prolong their stay in India after the government declared the lockdown and suspended international flights owing to the outbreak of Covid-19.

Section 6 of the Income Tax Act 1961 contains the provisions relating to determination of residency of a person in India. The status of an individual as to whether he is a resident or a non-resident depends upon the duration of his stay in a financial year.    

The CBDT has issued clarification to avoid “genuine hardship in such cases”, a government circular says. An individual who has come to India on a visit before 22 March 2020 and:

-- Has been unable to leave India on or Before 31 March, his period of stay in India after 22 March to 31 March 2020 shall not be taken into account

--Or has been quarantined in India on account of Covid-19 on or after 1 March 2020 and has departed on an evacuation flight on or before 31 March 2020. His period of stay from the beginning of the quarantine to his date of departure shall not be taken into account.

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-- Has departed on an evacuation flight on or before 31 March 2020, his period of stay in India after 22 March 2020 till the date of his departure shall not be taken into account.