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Nri taxation

ANJALI (STUDENT) (56 Points)

24 March 2017

IF ANY SALARIED PERSON WHO IS NRI , DOING JOB IN U.A.E. RECEIVE SALARY IN CASH. BRING AMOUNT IN CASH FORM IN INDIA. WHAT WILL BE THE TAX TREATMENT AS PER INDIAN INCOME TAX LAW ? IS THEIR ANY TAX LIABILITY WILL ARISE IN INDIA IF HE FILE INCOME TAX RETURN IN CAPACITY OF NRI IN INDIA?

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The ITAT relied on earlier judicial pronouncements and held that salary income is a compensation for services rendered by an employee. Thus, salary income in the hands of the non-resident employee cannot be taxed in India, if the services are rendered outside India. The place of receipt of the appointment letter is immaterial.

The ITAT rejected the contention of the tax department that the salary amount credited to the bank account in India should be subject to tax. It observed that the employee had a lawful right to receive the salary amount at the place of employment (which is the location of the foreign employer outside India). The ITAT held: "The connotation of an income having been received and an amount having being received are qualitatively different. The salary 'amount' is received in India in this case but the salary 'income' is received outside India".