NRIs to Submit Information Relating to Double Taxation

Several Non-resident Indians (NRIs) and foreign citizens who had visited India in 2019-2020 had gotten stranded due to international flights’ suspension due to the coronavirus pandemic. These individuals have made a representation before the Central Board of Direct Taxes (CBDT) for relaxation in determining residential status for the financial year (FY) 2020-21.

India went into a nationwide lockdown on 24th March 2020 following a COVID-19 outbreak. All international flights were suspended and later restarted in a restricted manner. This led to several individuals becoming Indian residents as these persons had intended to leave India but could not do so due to the travel restrictions in place.

On 8th May 2020, the CBDT clarified that the period of stay of these individuals falling under the lockdown period would not be counted to determine residential status for FY 2019-20. Hence, a similar representation was made for FY 2020-21 by NRIs, seeking clarification on the aspect of residency under Section 6 of the Income Tax Act.

On 10th February 2020, the Supreme Court directed the Board to decide what relief could be granted to NRIs on the payment of income tax for FY 2020-21. The CBDT has released a circular in this context on 3rd March 2021, stating that any individual facing double taxation after considering the relief provided in the relevant Double Taxation Avoidance Agreement (DTAA) should furnish the specified information by 31st March 2021.  

The required information is to be furnished in Form NR, which is annexed to the circular and submitted electronically to the Principal Chief Commissioner of Income Tax (International Taxation). Once the specified information has been submitted, the Board shall examine if any relaxation is to be provided to the individual in this regard or a general relaxation for a class of individuals.

For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in