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Is hra component of foreign income taxable for resident?

S Das (Finance Professional) (59 Points)

20 June 2016

Dear Experts,

I am a tax resident in India for AY2016-17. But I was Dubai in Dubai for a month for work where I got salary. It included HRA, and I paid for accomodation charges. There was no other tax deducted. When filing return, should I consider the full salary paid in Dubai for tax calculation? Or should I exclude the accomodation charges (more than HRA component paid in Dubai)?

Thanks in advance

regards

S Das

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2 Replies

Shishir Nayak ((Expert)) (369 Points)
Replied 21 June 2016

Your residential status for the relevant financial year would depend on the number of days stayed in India. If you satisfy condition to be resident of India for the said FY than As a resident of India, the entire income earned by you in India or outside India would be taxable in India.Therefore, the salary income earned by you in India as well as outside India would be taxable in India for the relevant financial year. However, taxes would be payable by you only when your salary income for the said period along with any other income earned by you in or outside India exceeds the basic exemption limit prescribed under income tax laws in India. Apart from this exemption, you could consider claiming credit for the taxes paid (if any) in Dubai against your Indian income tax according to the India–Dubai double taxation avoidance agreement. Also you can avail all those deduction including HRA what a resident Indian get but you should have proof for the same.

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S Das (Finance Professional) (59 Points)
Replied 22 June 2016

Dear Mr Shishir

Thank you very much for your response. I guess I was looking for the last line - "Also you can avail all those deduction including HRA what a resident Indian get but you should have proof for the same."

Some follow up question-

1. So I understand that I can claim deduction for HRA; I have proof (hotel bills). Can I claim deduction for only HRA component of my Dubai salary, or actual amount I spent on accomodaiton? (it was more than HRA component shown on my Dubai salary slip)

2. In general, independent of this - can we claim exemptions on regular maintenance charges for apartment society in India? If one stays in own apartment and pays INR 36000/p.a. for maintenance charges, is there any deduction on this in India?

Regards

S.Das