Foreign Company Paying Salary In India

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If you're an Indian resident working as a contractor for a foreign company (like one based in the UAE) and receiving salary payments directly into your Indian bank account, your income is taxable in India. Even though the payment originates from abroad and is converted to INR, it's considered income earned in India. Your tax status will depend on your residency, and payments for contract work are typically treated as business income.

Deepesh Aravandekar

Deepesh Aravandekar (Querist)

30 October 2023 Hello Expert, I am planning to join for a foreign (UAE Based) company as contractor from India. They will be paying in AED to directly my Indian bank account in INR based on the conversion rate for the same day.
Now, my query is under what category of taxpayer should I pay my tax and how will it be deducted.
Thanks for your help in advance.

Regards,
Deepesh

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

30 October 2023 You will be considered as resident tax payer in India if you provide services in India. Your residential status will be considered for taxation.

Deepesh Aravandekar

Deepesh Aravandekar (Querist)

30 October 2023 Hello Sir,
Thanks for your input.
Will I be considered as salaried employee only?
If I am working as contractor for foreign company as well.
Regards,
Deepesh

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

30 October 2023 Since foreign entity is sending money(as a consideration for your service ) directly to your bank account maintained in India, it become your income earned in India and consequently it will be taxed in India(as per the IncometaxAct,1961)irrespective of the nature of your service and residential status.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

30 October 2023 If you are working as a contractor it will considered as business income.

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