The COVID-19 flight restrictions have led to confusion among non-resident Indians with regard to their tax residency. Such individuals have effectively been stuck in India, involuntarily increasing their time in the country. This may expose their offshore business and professional income to tax in India, as it may be regarded as controlled from India and the individual may be regarded as 'resident but not ordinarily resident in India'.
The COVID-19 pandemic has led to increased interest in succession planning, including through wills. However, there are considerable practical and legal challenges to consider when making a will while social distancing, isolation or quarantine measures are in place. Although no solution is foolproof, there are some measures that may help testators to overcome the various complications associated with creating a will.
The issue of legatees versus nominees is still causing confusion among the public despite numerous judicial decisions which clearly confirm that legal heirs inherit assets over nominees. In November 2019 this position was confirmed once again when the National Company Law Appellate Tribunal held that nomination does not amount to beneficial ownership of an asset and that a nominee merely holds assets on behalf of the legal heirs of the deceased.
Trusts are internationally recognised as favoured vehicles for estate and succession planning. Although most private asset-holding trusts are lifetime trusts created under inter vivos documents such as a trust deed, testamentary trusts (also known as 'will trusts' in certain jurisdictions) are formed through testamentary instruments such as a will and take effect only on demise.
India, like most countries, is coming to grips with COVID-19. The country is now under official lockdown, and the next few weeks will be critical in determining whether it has been able to successfully contain the virus. All individuals, not just the elderly or ill, should take the time to implement an estate plan as it will make life simpler for remaining family members if the proper steps are taken now.