Clarification in respect of residency under section 6 of the Income-tax Act,1961

Last updated: 09 May 2020

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This circular provides clarification on determining tax residency in India under Section 6 of the Income-tax Act, 1961, specifically for the previous year 2019-20. It addresses concerns from individuals who intended to leave India but were unable to do so due to the COVID-19 lockdown and flight suspensions. Special provisions are outlined to avoid genuine hardship by excluding certain periods of stay in India from the residency calculation.

Circular 11 of 2020 F. No. 370142/18/2020-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, May 8, 2020 Clarification in respect of residency under section 6 of the Income-tax Act, 1961 Section 6 of the Income-tax

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FAQ :

The circular clarifies the determination of tax residency in India under Section 6 of the Income-tax Act, 1961, for the previous year 2019-20, considering the impact of COVID-19.

Many individuals who came to India for a visit were unable to leave before the end of the previous year due to the COVID-19 lockdown and flight suspensions, potentially affecting their non-resident status.

For individuals who arrived in India before March 22, 2020, and could not leave by March 31, 2020, their stay in India from March 22, 2020, to March 31, 2020, will not be counted for residency determination.

If an individual was quarantined in India on or after March 1, 2020, and departed on an evacuation flight by March 31, 2020, or was unable to leave by March 31, 2020, their period of stay from quarantine to departure or March 31, 2020, will not be counted.

If an individual departed on an evacuation flight by March 31, 2020, their period of stay in India from March 22, 2020, to their date of departure will not be taken into account for residency purposes.