Indian citizen income from europe

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 October 2013 Hello,

This is to file Income tax for FY 12-13

My client is worked in India till Aug-12 and then he changed job to Belgium.

He is getting salary from Belgium and they are deducting his tax as per there rules and same is reflecting on his salary slip.

Only Problem that he worked there till Dec 12 and then he came back to India on deputation.

But still he is getting payment from Belgium in euros in Belgium bank and they are deducting his tax over there,

because of same my Client is not NRI but getting salary from Belgium.

In this case I need your help to file his tax in India.

I will fill his ITR form as per form 16 form Indian company (where he worked till August-12) for further income ,
(1st Question) please let me know where to mentioned his income from Belgium but obvious which will be not taxable as he paid tax in Belgium.

(2nd Question) - Shall I mentioned his Belgium income in exemt income.

(3rd Question) - Which ITR form is applicable to fill his income tax return.

Thanks
Pranali

Nikhil Kaushik

Nikhil Kaushik (Expert)
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05 October 2013 1. Since your client has stayed outside india for less than 182 days, he shall be treated as resident for tax purposes. His global income shall be taxable in India. He can claim credit for taxes deducted in Belgium under section 90.

2. Check DTAA with Belgium to determine its taxability. In no case it can be considered as exempt income. Before you form any such view, you to back it up with relevant sections of income tax act or caselaws.

3. U can use ITR 2.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2014 Hi Nikhil
Thanks for your reply, I studied other article also and now I can do tax file for same.

Only last query / confirmation expected from you

Query/Confirmation 1. Shall I mention the foreign tax amount in TR_FA.
Query/Confirmation 2. Shall I mention Foreign income in FSI.
Query/Confirmation 3. With this I can take tax benefit on Indian taxable amount for the tax amount paid in foreign.

Awaiting your confirmation.

Many Thanks

Pranali

Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2014 Hi Nikhil,

Thanks for your reply,

I studied articles also and now I can do tax file for same. Only last query / confirmation expected from you

Query/Confirmation 1. Shall I mention the foreign tax amount in TR_FA.

Query/Confirmation 2. Shall I mention Foreign income in FSI.

Query/Confirmation 3. With this I can take tax benefit on Indian taxable amount for the tax amount paid in foreign.

waiting for your confirmation

Regards,
Pranali

Nikhil Kaushik

Nikhil Kaushik (Expert)
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31 January 2014 Hi Pranali,

Lets go step by step:

1. You shall mention the income earned in Belgium in FSI sheet.

2. Then you will go to TR_FA sheet for tax paid information and consequent relief.

3. The details filled in TR_FA sheet would automatically result in tax credit in PARTB-TI-TTI-SAL sheet in Point 4 of PartB-TTI - Tax Relief

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Querist : Anonymous

Querist : Anonymous (Querist)

06 February 2014 Dear Nikhil,

Thanks for valuable reply. May be last 3 doubts.

1. What is conversion rate, I shall use,
For converting tax paid amount in Euro in Europe to show INR for Section TR of ITR-2
AND,
For converting Europe salary income in INR, for section FSI of ITR -2?
I guess the conversion rate on the day when I had peak balance in my foreign account in FY-2012-13.

2. I am Contract employee at Belgium, working for manpower supplier, Hence I can consider my self as Profession service provider. - with this I can fill the ITR-4 to consider my business expenses for tax exemption and and take benefit of DTAA.

3. If I am transferring my salary of FY 12-13(let say Feb & March -2012) in Indian account in May 2013 or later on, then that amount will consider in which year ITR (AY 13-14 OR AY 14-15)?

Please confirm possible any of 3 points to complete ITR for FY 12-13.

Thanks,
Pranali

Querist : Anonymous

Querist : Anonymous (Querist)

03 November 2015 Dear Nikhil,

Can you help us to know the Article no. to be written in Section 90- of Schedule (TR-FA), ITR-2, if my client stayed in Belgium less than 183 days in same FY or previous FY.

If you need more information, please write me or refer above communication.

Thanks
Pranali

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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01 August 2024 To address your queries about filing income tax returns for an Indian citizen with foreign income, let's break it down:

### 1. **Reporting Foreign Income in ITR:**

**(1) Mentioning Income from Belgium:**
- **Where to Report:** You need to report your foreign income in the **Income Tax Return (ITR-2)** form under the section for foreign income. This is typically done in the "Foreign Income" section.

**(2) Exempt Income:**
- **Exemption:** Income earned from Belgium is not necessarily exempt but is taxable in India after accounting for taxes paid abroad. You do not mention it under exempt income; rather, you report it under foreign income and claim a tax credit for the taxes paid.

**(3) Applicable ITR Form:**
- **Form:** For foreign income, **ITR-2** is typically the appropriate form, as it is used for individuals who have income from more than one source, including foreign income.

### 2. **TR_FA (Tax Relief under Section 90/91):**

**(1) Foreign Tax Amount in TR_FA:**
- **Reporting:** Yes, you should report the foreign tax amount in the **TR_FA** section of the ITR form. This section is used to claim a credit for taxes paid abroad.

**(2) Foreign Income in FSI:**
- **Reporting:** Yes, mention the foreign income in the **FSI (Foreign Income)** section of the ITR form. This is where you report details of foreign income and taxes paid.

**(3) Tax Benefit on Indian Taxable Amount:**
- **Benefit:** You can claim a tax credit for the foreign taxes paid, reducing your Indian tax liability under the **Foreign Tax Credit** section.

### 3. **Conversion Rates:**

**(1) Conversion Rate for Tax Paid:**
- **Rate to Use:** Use the conversion rate on the date when the foreign tax was actually paid. This rate is typically available from the Reserve Bank of India (RBI) or any authorized dealer.

**(2) Conversion Rate for Salary Income:**
- **Rate to Use:** For converting salary income, use the average exchange rate for the financial year. If you don’t have specific average rates, you can use the year-end rate or the RBI’s yearly average rate.

### 4. **Filing Based on Transfer of Salary:**

**(1) Transfer to Indian Account:**
- **Assessment Year:** The salary will be considered for the assessment year in which it is received in India. So, if you transfer it in May 2013, it will be considered for the Assessment Year 2013-14.

### 5. **Filing ITR with Short Stay in Belgium:**

**Article Reference:**
- **Section 90:** If your stay was less than 183 days in the financial year, you should mention Article 15 of the Double Taxation Avoidance Agreement (DTAA) between India and Belgium in Section 90 of Schedule TR-FA.

### **Summary of Key Points:**

1. Report foreign income in ITR-2 and claim foreign tax credit in TR_FA.
2. Convert foreign income and tax using the appropriate rates provided by the RBI or authorized dealers.
3. File the ITR for the year when the foreign salary is received in India.
4. Reference DTAA articles relevant to the tax treaty between India and Belgium.

For precise details, especially on DTAA provisions, it's advisable to consult with a tax professional who can provide guidance specific to your situation and ensure compliance with all applicable tax regulations.

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