Income tax in India for income Earned in UAE by a salaried employee
I have a query. I have been employed in India from Mar 21 to 15 Nov 21 with my physical presence for all these days in India. From 15 Nov 21 onward I will moving to UAE as I have received an offer of employment from a company based totally in UAE. I am going to get salary in my UAE local account in local currency paid by a local employer from 15 Nov 21 to 31st March 2022 and so on for next coming years. In this Indian Financial year, I have been present in India for more than 182 days in India and I have a Indian income as well from my employment in India which will end on 15th Nov 21.
Now as I shift to UAE and will earn local salary there, I want to know what will be Indian tax implications for the salaried income earned in UAE. Note, UAE is a no tax country but has Double Taxation Avoidance Agreements with India.
I know that my Indian salary will be taxable as per Indian IT rules. But will there be any taxation on my UAE salary for this Financial year in India (01 Apr 21 to 31 Mar 22).
Note: Financial year in UAE is from 1 Jan to 31 Jan. I am going there to stay for next 1-2 years which means for UAE financial year (1 jan 2022 to 31 Dec 2022) I will receive my resident tax certification after spending 6 months (If I go on 16th Nov then will complete 6 moths on 15th May) in total in UAE.
As you will be present more than 182 days (for FY 2021-22) in India, your status will be Resident Indian.
Which means all your global earning till march 2022 will be taxed in India.
As you wan't be paying any tax in UAE, so you cannot claim any tax rebate in ITR.
Also will I have to pay taxes for my income in UAE till Mar2022 or tax will only be applicable for income of Nov and Dec 21.
As in UAE Financial year 2022 starting 01 2022, I will achieve a resident tax certificate in UAE by May 2022..which should be applicable for UAE financial year Jan 2022- Dec 2022
Also the Income tax in India would be as per Indian IT slabs or will there be any special Income tax rates applicable on foreign income as per DTAA
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1. Subject to the provisions of Articles SIXTEEN, SEVENTEEN, EIGHTEEN, NINETEEN, TWENTY and TWENTY ONE, salaries, wages and other
similar remuneration derived by a resident of a Contracting State in respect of an
employment shall be taxable only in that State unless the employment is exercised in the
other Contracting State. If the employment is so exercised, such remuneration as is derived
therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a
Contracting State in respect of an employment exercised in the other Contracting State shall
be taxable only in the first-mentioned State if:
(a) the recipient is present in the other State for a period or periods not exceeding in the
aggregate 183 days in the relevant "previous year" or "year of income", as the case
may be; and
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the
other State; and
(c) the remuneration is not borne by a permanent establishment or a fixed base which the
employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect
of an employment exercised aboard a ship or aircraft operated in international traffic by an
enterprise of a Contracting State shall be taxable only in that State.
No special rate of tax applicable in india, only slab rates applicable.
Please note I will start receiving the income from Dec 2021 onwards.