Income tax return to be filed or not for ay 18-19

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2018 A PERSON HAS GONE FOR EMPLOYMENT IN DUBAI. HE IS IN DUBAI FOR MORE THAN A YEAR AND SO HE IS NON RESIDENT.
HE RECIEVES HIS SALARY IN INDIAN BANK BRANCH IN INDIAN RUPEES .VIA RTGS

Q.1 WHETHER HE IS LIABLE TO FILE HIS RETURN IN INDIA FOR THE SALARY EARNED IN DUBAI FOR AY 18-19 ???
Q.2 IF SALARY IS RECIEVED IN FORM OF FOREIGN CURRENCY IN SAME INDIAN BANK ACCOUNT, THEN WHETHER HE HAS TO FILE ITR FOR AY 18-19 ???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 April 2018 As he is non resident, salary earned outside India is not taxable in India even if it is credited in Indian bank account in Indian currency or in foreign currency.
No need ti file ITR in India.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 April 2018 If the bank branch is situated in INDIA, then salary earned abroad is taxable in India.
Inference - section 5(2)(a).
The only exception to the above is salary earned by seafarers. Circular 13/2017
dated 10-04-2017

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 April 2018 The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that income earned from abroad is not taxable in India even if the assessee received salary through bank account in India. The assessee is being an individual who was employed in a company at Mumbai and he was deputed to Iraq. During the time of deputation he earned a salary of Rs 40,04,830/ from Iraq. The assessee has been claimed exemption from tax for the said amount because he was stayed in Iraq more than 182 days. In this view he is a non-resident of India therefor he does not need to pay any tax in India. And The return of income in India was filed at an income of Rs.98,520/- after claiming exemption of aforesaid amount of salary income. But the CIT has noticed that the assessee has reduced his salary income earned on deputation from abroad by mistake. And he argued that according to the provisions of section 5(2) which provides that total income of non-resident includes all income received or accrued from whatever source derived in India is taxable in India. The bench comprising of AMIT SHUKLA ( Judicial Member) and WASEEM AHMED (Accountant Member) has observed that “if any person who has been stayed outside India for more than 182 days then the person become a non-resident of India. In this case the assessee has submitted the relevant documents which proved that he has been stayed in Iraq more than 182 days hence now he is considered to be a non-resident Indian. The aforesaid provision of the section is not applicable in this case, because the assessee does not earned any income from India and the total income received by him for the services rendered out of India. No such income has been received by the assessee for carrying out any activity in India. And it should be treated as income earned from abroad hence it is not taxable in India”. While allowing the appeal of the assessee the bench has declared that income earned from abroad by a non-resident Indian would not be taxable in India even though the assessee had bank account in India.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 April 2018 Pramod Kumar Sapra v. Income Tax Officer, Delhi [2017] 87 taxmann.com 98
(Delhi - Trib.). This decision is also in favour the assessee ( not to be taxed
in India). But the circular referred can't be ignored rather viewed seriously.

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