income earned in other coumtry

This query is : Resolved

divya khanna (Querist)
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12 September 2007 IF AN INDIVIDUAL EARNS INCOME(SALARY) IN OTHER COUNTRY(U.S.) AND PAYS ITS TAX IN THAT PARTICULAR COUNTRY ITSELF ,THEN IF HE IS LIABLE TO PAY TAX IN INDIA ACCORDING TO INDIAN INCOME TAX LAW OR NOT.IF HE SHOULD ALSO DISCLOSE THIS INCOME IN HIS RETURNS AS WELL.

CMA Gul S

CMA Gul S (Expert)
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12 September 2007 How many days was he in US and in a particular year how many days is he in INDIA

R.V.RAO

R.V.RAO (Expert)
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12 September 2007 First of all , one should note that , one will stay in India for more than 182 days and thus become Resident as per section 6 of the I T Act.As soon as one becomes resident , one's global income i.e all income whether earned in India or abroad shall become taxable in India .
But section 91 is there to mitigate the hardship of double taxation on any income which has been taxed in a country with which India has no Double Taxation Avoidance Agreement signed. For those country with which DTAA is signed, section 90 is there in Income Tax Act.The section 91(1) is given as under:

If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal"
( source:www.taxworry.com)
C.A.R.V.RAO

divya khanna

divya khanna (Querist)
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14 September 2007 if the person is resident of INDIAand he has stayed in USA for about a month in peviuos year 2006-07and for about 3 month in previous year2007-08

honey

honey (Expert)
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10 October 2007 Since the person is a resident in India under the act, his global income is taxable in India. Therefore, salary earned in USA is also taxable in India.

However, if any tax has been deducted while paying salary to such person in USA, tax credit for such deduction will be available in India under Article 25 of the Indo-US DTAA.