CBDT asks NRIs facing double taxation to provide information on forced residence due to Covid


The Central Committee on Direct Taxes (CBDT) on Wednesday requested information from non-resident Indians (NRIs) who face double taxation due to forced residence in India. This is part of the explanation issued regarding the status of residence under the Income Tax Act.

This attitude came after the Supreme Court, on February 10, asked the board to make a decision within three weeks on the relief that will be granted to NRIs when paying income tax for the financial year 2020-21. After the Covid-19 pandemic. Now the board has said it has received various statements asking for relaxation in determining housing status for the previous 2020-21. The year of the persons who came to visit India during the previous 2019 -20. For years, they intended to leave India, but could not do so due to the suspension of international flights. Since then, the matter has been investigated by the CBDT.


“If any person faces double taxation even after taking into account the benefits provided by the relevant Double Taxation Avoidance Agreement (DTAA), he / she can submit the above data by March 31, 2021 in the NR form,” he said. is a board in a circle. This form should be submitted electronically to the Chief Income Tax Commissioner (International Taxation).

On May 8, 2020, the CBDT issued a clarification for FY 2019-20, regarding the aspect of residence under Section 6 of the IT Act, which provided various relaxations to NRIs that could not return to the country in which they work / reside due to locking. NRIs have sought similar clarifications to be provided for fiscal year 2020-21.

In its circular, the CBDT said that the OECD (Organization for Economic Co-operation and Development), like most countries, had clarified that given the provisions of domestic income tax law read in the DTAA, (Double Taxation Avoidance Agreement) there is no possibility of double taxation of income for FY 2020-21. “The possibility of double taxation does not exist under the provisions of the Income Tax Act of 1961, read in the DTAAs,” it says.

However, the CBDT said, in order to understand the possible situations in which a particular taxpayer faces double taxation due to forced residence in India, it would be able to obtain relevant information from such individuals. “After understanding the possible situations of double taxation, the Committee will examine this, – whether it is necessary to ensure any relaxation in this matter; and if necessary, then can general relaxation be provided for a particular class of individuals or is it necessary to provide some relaxation in individual cases, ”the tax authority said.


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