Foreign remittances and taxation

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anandha (Querist)

13 March 2010 I would like to know about the taxation of foreign remittances to India. For an individual going abroad for employment purpose and being qualified as ordinary resident Indian.

1) Whether the money remitted from abroad to the individual's saving account is taxable. I'm particular if the individual has not made use of any NRE account in this case. What is the tax slab for the foreign remittances say for 10000 USD ?
2) Further does this should be filed as additional income if the individual earns salary from abroad as well as in India for the current financial year?
3) Why is there a discrimination of money remitted to relative accounts/parent accounts is not taxable under Indian law? Is it not considered as a loop hole in the existing law?
4) Is there a strict code for obtaining remittance certificates (form 15CB)? Should the remittance certificates be filed along with the returns?
5) What is the benefit of double taxation treaty in this particular case? Does this mean that if the individual has paid tax in the foreign land he is not expected to pay tax in India?
6) Are there any specialized tax consultant dealing with such foreign remittance taxation in Chennai?

Thanks
Anandha.

shakuntala chhangani

shakuntala chhangani (Expert)

14 March 2010 Hi Anandha, the reply for ur question is :
1) since the individual is ordianry resident in India, his worldwide income will be taxable in India irrespective of whether he remits the same in India or not.
2) the abovementioned point covers point 2 also.
3) when money is transferred to relatives account, it is considered as gift which is not taxable in case of relatives (after abolition of gift tax). however, it will reduce the capital of the individual gifting the same.
4) i m not aware of any such certificate.
5) in case of DTAA, TAX once paid in the country in which income is earned, it will not be taxed again in INDIA to avoid double taxation of the same income.
6) Dear, i m based in Mumbai so can't help.
Regards, CA Shakuntala Chhangani

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