Relief to NRIs!!

Supreme Court directs CBDT to provide relaxation guidelines for NRI’s prolonged stay in India on account of COVID-19

An individual’s residential status in India is dependent on his period of stay in India. With the outbreak of the COVID-19 pandemic, NRIs who had come on a visit to India were forced to prolong their stay in India due to declaration of the lockdown and the resultant suspension of international flights. This had raised concerns among NRIs as their prolonged stay in India may affect their residential status as a Non-Resident.

The Central Board of Direct Taxes (CBDT) had issued a Circular relaxing the residency conditions for financial year 2019-20 in case of persons who came on visit to India before 22 March 2020. With financial year 2020-21 coming to a close, NRIs are seeking clarifications regarding the relaxation in residency conditions for financial year 2020-21.

In this background, a writ petition was filed by an NRI before the Supreme Court (Gaurav Baid vs Union of India & ORS) seeking relaxation in residency conditions for the financial year 2020-21. Considering a similar benefit had been conferred by the CBDT for the earlier financial year 2019-20, the Supreme Court has directed the NRI to make a representation before the CBDT and the Court has also directed the CBDT to consider such petition within 3 weeks of its receipt, which can be expected to be received in the normal course before end of March 2021.

The Supreme Court's order is a much awaited one and an NRI who involuntarily remained or continues to remain in India owing to COVID-19 restrictions can soon be expected to receive some relief with regard to their residential status in India.

Disclaimer: The views / the analysis contained therein do not constitute a legal opinion and is not intended to be an advice. Readers of this document are advised to seek their own professional advice before taking any course of action or decision, based on this document.

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