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.
23 September 2021
Good luck for the better job opportunity.... 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.
23 September 2021
Thanks for your reply and warm wishes sir. But I am just trying to understand then what would be the benefit of DTAA with UAE?
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
23 September 2021
Not Sure If I completely understand this Article 15 from DTAA from India and UAE
ARTICLE 15 DEPENDENT PERSONAL SERVICES 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.
24 September 2021
Sir @CA R SEETHARAM thanks for your reply. Just to clarify slab rate applicable in India, will also have tax implication on my salaried income in UAE or only Salaried income in India. In other word If I fall in 30 percent slab for my income in India, Do I have to pay 30 percent tax to Indian IT on my salary earned in UAE ?
24 September 2021
The same slab rate will be applicable (in India), i.e. 30% on your salary earned in UAE, along with that earned in India; including any other income from Other Sources.
24 September 2021
Sir if you dont mind One more question, in case I join this opportunity in UAE and start receiving monthly salary of Rs 100000 (converted to INR) each at end of Dec 21, Jan 22, Feb 22, Mar 22, then when should I pay the advance or self assessment tax to avoid any interests on top of it? Should I pay 30,000 INR each month as soon as I receive the interest or is it ok to pay cumulative tax of all 4 months in Mar 22 before 31 Mar. I want to avoid any interests on top of it.
Please note I will start receiving the income from Dec 2021 onwards.
CAclubindia
