Income tax on remote working

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2016 I've been recently offered a Job by Paris, France based startup. The work mode is remote, so I'll be working from Bangalore, India and I have always stayed in India. I wanted to understand the general tax going to be levied on me if I take up the Job offer. I also had few specific questions in this regards:

(1). I assume I won't be doubly taxed but I'm not sure. I hear of some double taxation treaty but not sure if France and India have this treaty signed. Any idea about it?

(2).My employer told me that its legally a contract role, because they don't have an entity registered in India. Essentially, its a full-time role but I'm being hired as contract. With that being the case, can I term my income as "business income".

(3).A friend of mine told me that additional 14% VAT will be levied on me because of the contract nature. Is that true? Could you please clarify as this affects my take home salary?

Thanks in Advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 April 2016 1 India and France have DTAA you will not be doubly taxed.
2 Treat it as contractual employment so that your income will be treated as salary for which no VAT payable.

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Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2016 Thanks for taking time from your busy schedule to answer these questions. It is very helpful. I have just one additional question.

With DTAA, is it the case that I'll be taxed at source (France) which might be more than 30% and I'll have to claim that amount as Federal Tax Credit (FTC)? OR is it that I'll get the full salary credited (zero deduction at source) and I have to voluntarily pay the 30% tax?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 April 2016 You may not be taxed at source. In case of tax deduction in France you will get relief in paying Indian tax.
In case no TDS you have to file the return and pay full taxes in India.

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