The Supreme Court on Wednesday directed the Central Board of Direct Taxes (CBDT) to decide within three weeks on reliefs to be granted to Non-Resident Indians on payment of income-tax for the financial year 2020-21 in the wake of the Covid-19 pandemic.
The Court also directed the petitioner, Dubai-based NRI Gaurav Baid, to represent the CBDT within three days. Baid came to India in March 2020 on a visit and was able to travel back after 182 days in India in 2020-21. This involuntarily extended stay, the petitioner feared, may result in his losing the non-resident status under the Income Tax Act, 1961, thereby exposing his global income to tax in India. The petitioner was assessed as an NRI in 2019-20.
The Home Ministry and the Civil Aviation Ministry had prohibited or suspended international air travel for the most part of FY2020-21. As a consequence, many NRIs had had to extend their stay in India. This is the problem highlighted by the present petition.
The Finance Ministry had issued a clarification on May 8 2020 for FY 2019-20, on the aspect of residency under Section 6 of the I-T Act wherein various relaxations were provided to NRIs who could not travel back to their country of work/residence because of the lockdown. No such clarification has been provided to date for FY 2020-21.