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NRI’s May Get Lockdown Relief if There is a Double Taxation Issue

The Central Board of Direct Taxes (CBDT) has received various representations requesting for relaxation in the determination of residential status for the previous year 2020-21 from individuals who had come on a visit to India during the previous year 2019-20 and intended to leave India but could not do so due to the suspension of international flights.

NRI Double Taxation Issue

In this context, CBDT has issued a circular where it has been provided that if any individual is facing double taxation even after taking into account the relief provided by the relevant Double Taxation Avoidance Agreement (DTAA), the person may furnish the specified information by 31st March 2021. The information has to be submitted in Form “NR” and is to be submitted electronically to the Principal Chief Commissioner of Income-tax (International Taxation).

In a circular, the CBDT said that if any individual is facing double taxation even after taking into account the relief provided by the relevant Double Taxation Avoidance Agreement (DTAA), he/she may furnish the specified information electronically by 31st March 2021, to the Principal Chief Commissioner of Income-tax (International Taxation).

CBDT circular has clarified that under the provisions of Double Taxation Avoidance Agreements (DTAA), chances of an individual getting taxed in two jurisdictions simultaneously are rare and enough protection has been build to protect the tax liability of taxpayers based on residency. Moreover, OECD as well as most of the countries have clarified that in view of the provisions of the domestic income tax law read with the DTAAs, there does not appear a possibility of double taxation.

Please contact our office if you need any assistance in this matter.

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