As part of its assistance to non-resident Indians (NIH), on Friday the government allowed them to avoid a period of involuntary residence when determining their fiscal residence status.

The government has taxed 24 of them. Mars a blockade and has not yet released travel, including international flights.

Several IIPs/individuals of Indian origin who came to India before the blockade were unable to return and expressed concerns about their status as tax residents.

Given the different perceptions of people forced to prolong their stay in India as a result of the blocking and suspension of international flights, and who have expressed concern about having to file tax returns as residents of India, Finance Minister Nirmala Seetharaman has today (Friday) granted a reduction for long-term stay in India to determine the residence status, – said in a press release from the Central Council for Direct Taxation (CDCDT).

Although support has been provided for 2019-20, a follow-up circular will be issued for 2020-21 once international flights have resumed.

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… We still don’t know when international flights will resume. After the resumption of the flight, a circular letter will be issued excluding the length of stay of these persons until the date of normalisation of international flights in order to determine their residence status for the financial year 2020-21, the Circular States.

The Circular provides that a person born before the age of 22 years The applicant entered India on 31 March 2020 and India did not enter the territory of the Community on 31 March 2020. March 2020 always on March 31st. In order to be able to leave the country by March 2020, the period of their stay in India will be extended from 22 to 31 March 2020. The month of March will not be taken into account. Even in cases where a person has been convicted of Covida in India as of 1 January 2009, it is still likely that he or she will be placed in quarantine on or before 31 March or that India has taken an evacuation flight on or before 31 March If a person has not been able to leave during the month of March, the period of his or her stay between the start of quarantine and the date of departure will not be taken into account.

Figure At the suggestion of the OECD (Organisation for Economic Co-operation and Development), India has decided to exclude unintentional residence due to quarantine / blockade. It was an expected relief and it is good that the government acted quickly to solve the problem. I hope this will also be the case in FY21, said Amit Makheswari, partner at AKM Global.

Shilesh Kumar, director of consulting firm Nangia, Andersen Consulting, said we are satisfied. A similar circular letter is expected for financial year 21. The tax residence of natural persons is determined on the basis of the number of days spent in India during the tax year.

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Any person staying in India for at least 182 days during a fiscal year shall be entitled to stay in India for the duration of that year. A person who has resided in India for at least 60 days in any tax year may also be considered to be a resident for tax purposes if his or her total stay in India in the previous four tax years exceeded 365 days.

However, for intellectual property rights and ITTs, the minimum period of residence has been reduced from 182 to 120 days to allow for the granting of a residence permit if the total period of residence of such intellectual property rights or ITTs in the previous four years exceeds 365 days and the total taxable income is higher than Rs. 15 (excluding income from foreign sources).