Stranded Indians won’t lose NRIs status, don’t need to file returns: Govt

Indians living abroad are not treated as a resident for tax purposes by the income tax department provided they spend less than 120 days in India.

Finance Minister Nirmala Sitharaman on Friday ordered the income tax department to make an exception for non resident Indians who are stuck in India due to the Covid-19 and suspension of international flights.

Crew members of the flight that got Indian nationals stranded in Singapore wear face shields due to the coronavirus disease (Covid-19) outbreak, in New Delhi, India, May 8, 2020. (REUTERS)

Indians living abroad are not treated as a resident for tax purposes by the income tax department provided they spend less than 120 days in India.

But there were many NRIs who have had to extend their stay in India due to the Covid-19 lockdown, some have breached the 120-day limit and many others face the prospect of doing so over the next few days.

A finance ministry official said the minister had received many representations from people who have had to prolong their stay due to the suspension of international flights, worried that they would have to file tax returns as Indian residents. In order to help such people, the official said Sitharaman had allowed them to discount the extended stay to determine their residence status.

The exception applies to individuals who came to India before 22 March and had been unable to leave the country on or before 31 March 2020. It will also benefit NRIs who had been quarantined in India after 1 March on account of Covid-19. This discounted calculation of dates shall be extended to NRIs whether they had left the country in an evacuation flight or were still in the country.