Direct tax and rbi restrictions
This query is : Resolved
15 October 2011
One of the private Limited company has two directors one Indian and another director is non resident. Now the company proposes to pay salary to all the directors. I would like to mention that there is no branch office in US and one of the directors of the company operates from his home in USA.
Query
Can the indian company pay full salary to the US director saying that the director is on deputation.All the taxes will be deducte in India and only the net salary will be remitted.
Deoes the reimbursement of expenditure to the US director reqires RBI permission
What is the implication under the US tax laws. Will the US tax laws allow such trasaction
Query
Can the indian company pay full salary to the US director saying that the director is on deputation.All the taxes will be deducte in India and only the net salary will be remitted.
Deoes the reimbursement of expenditure to the US director reqires RBI permission
What is the implication under the US tax laws. Will the US tax laws allow such trasaction
CA. Anuj Gupta
(Expert)
30 October 2011
1.Can the indian company pay full salary to the US director saying that the director is on deputation.All the taxes will be deducte in India and only the net salary will be remitted.
- YES, Indian Co. can pay full salary but TDS should not be deducted if the person is NR(ie stay is less than 182 days in PY or 60 days in current Previous year and 365 days in 4 previous years)
2.Does the reimbursement of expenditure to the US director reqires RBI permission
- If it the expenditure is normal current account transaction, then there should be no issue for the same.
3.What is the implication under the US tax laws. Will the US tax laws allow such trasaction
- You need to consult US Tax Consultant for the same.
Anuj
+91-9810106211
femaquery@gmail.com
- YES, Indian Co. can pay full salary but TDS should not be deducted if the person is NR(ie stay is less than 182 days in PY or 60 days in current Previous year and 365 days in 4 previous years)
2.Does the reimbursement of expenditure to the US director reqires RBI permission
- If it the expenditure is normal current account transaction, then there should be no issue for the same.
3.What is the implication under the US tax laws. Will the US tax laws allow such trasaction
- You need to consult US Tax Consultant for the same.
Anuj
+91-9810106211
femaquery@gmail.com
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