23 August 2015
Hello experts, An Indian non resident is prestently employed in Nigeria and receiving salary income thereIs that salary income will be taxable in India ?As there is no DTAA with Nigeriathat assessee has income from other sources also in India Thanks in advance
Basis of taxability of income govern by section 5 of I/tax of India.
Broadly, and individual could be a resident or a non-resident in a particular tax year. Once an individual's residential status is determined to be a resident, it is further examined whether he is an ordinary resident or not an ordinary resident in India.
PHYSICAL STAY – BASIC TEST
An individual is said to be a resident in India if he fulfils any of the following two conditions. First, if he is present in India for a period of 182 days or more in that tax year OR second, if he is present in India for a period of 60 days or more during the relevant tax year and at least 365 days or more during the four preceding tax years. In case an individual does not satisfy any of the above two basic conditions, then he is said to be a non-resident.
CONCESSION FOR NRIS
In the case of a citizen of India, who leaves India in any tax year for the purposes of employment outside India, the above said period of 60 days is substituted by 182 days. This is particularly beneficial for individuals going and working overseas in a particular tax year.
Similarly, in the case of a citizen of India or a person of Indian origin who being outside India, comes on a visit to India in any tax year, the above said period of 60 days is substituted by 182 days. This is helpful for non-resident Indians who visit India for family or other purposes.
DOUBLE TAXATION AVOIDANCE AGREEMENTS – IMPORTANT
It is also important to examine the conditions laid out under the respective Double Taxation Avoidance Agreements (DTAAs), also know as treaties, which India has entered into with other countries to finally determine the taxability or otherwise for any particular source of income.
Generally, the DTAAs provide for taxability of income in one country. Else, if the income is subject to tax in both the countries, then credit could be claimed for tax paid in the other country, subject to the prescribed conditions.
As of now, there is no treat entered into with India.
Once status confirmed then we need to look at the provision of I/tax which says : The total income of a person who is a non-resident includes all income which is received or is deemed to be received in India or accrues or arises or is deemed to accrue or arise to him in India. So, the scope of total income of a non resident assessee is limited to income which is received or deemed to be received in India or which accrues or arises or is deemed to accrue or arise to him in India.
As in present case, income accrued and arise outside India i.e. Nigeria, It will not be taxed in India. Irrespective of remittance made/received in India, that is not the case even.
CAclubindia
