The Supreme Court 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 to 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 FY 2020-21. This involuntary 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 FY 2019-20. The Home Ministry and the Civil Aviation Ministry had prohibited or suspended international air travel for most part of FY 2020-21. 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 8th May 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 or residence because of the lockdown. No such clarification has been provided till date for FY 2020-21.