Itr filing

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Madhu H S (Querist)
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09 June 2014 Dear Sir

Pls advise w.r.t the following:
Facts
* Mr. X is a citizen of UK, working as a teacher in a school in India for last 630 days. (So he is an RNOR)
* As per India - UK DTAA (Article 22), salary income of Mr. X is exempt in India upto 2 years.
* He is getting salary (~50 lakhs) in his Indian bank account from that school & he has no other income in India (except interest on his Saving Bank A/c which is ~ Rs 12000)

Query:
1. While filing ITR-2 his salary income to be shown as zero & exempt income as 50 lakhs. If the answer is positive, the new ITR utility in "SCHEDULE-EI",should it be shown under sl. no 5 (anyother exempt income including income of minor child)?

2. "SCHEDULE-TR" is applicable only for the cases where the income is taxable in both the country & he is claiming the credit of tax paid in UK while calculating total tax liability in India. Pls let me know whether my understanding is correct.

Thanks.

Rupesh Jain

Rupesh Jain (Expert)
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09 June 2014 article 22 as below.

ARTICLE 22 - Teachers - 1. An individual who visits a Contracting State for a period not exceeding two years for the purpose of teaching or engaging in research at a University, college or other recognised educational institution in that State, and who was immediately before that visit a resident of the other Contracting State, shall be exempted from tax by the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for such purpose.

2. This Article shall only apply to income from research if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other private person of persons.

if the income of above employee fall under research and with recognized institute or university then he/she take exemption otherwise not available.

as you mention he/she get salary form school . in my opinion salary is not exempt and tax pay by the citized of UK.

Madhu H S

Madhu H S (Querist)
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09 June 2014 Thankyou for ur reply.
School has taken expert opinion reg. applicability of DTAA & it is applicable to teachers of school (its an International- i.e. recognised education institution).

Pls advise regarding ITR filing part.

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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02 August 2024 Given the facts and queries related to Mr. X’s income and tax return filing, here’s how to proceed:

### **1. Reporting Salary and Exempt Income in ITR-2**

**Salary Income and Exemption:**
- Since Mr. X is a citizen of the UK and is working in India as a teacher for 630 days, his salary income is exempt in India for up to 2 years as per the India-UK DTAA (Article 22). Therefore, in ITR-2, you should reflect this correctly.

**Reporting in ITR-2:**
- **Salary Income:** While filing the ITR-2, you should show the salary income as zero in the relevant section, since it is exempt under DTAA.
- **Exempt Income:** For the exempt income of ₹50 lakhs, you will need to report it as exempt income. In the new ITR utility:
- **Schedule EI (Exempt Income):** Yes, you should report the exempt income under "Schedule EI" in **sl. no. 5**. This section is meant for any other exempt income, including income under specific exemptions as per DTAA. Enter the details of the exempt salary income here.

### **2. Understanding Schedule TR**

**Schedule TR (Tax Relief):**
- **Applicability:** Schedule TR is used to claim relief under the DTAA for taxes paid in another country. This is applicable when the income is taxable in both India and the foreign country, and the taxpayer is claiming a credit for the foreign tax paid.
- **Your Case:** Since Mr. X's salary is exempt in India under the DTAA and he is not claiming any credit for taxes paid in the UK, **Schedule TR** does not apply in his case. You only need to fill out Schedule TR if you are claiming relief for taxes paid abroad. Since Mr. X’s income is exempt in India, there is no requirement to claim any tax credit or relief.

### **Steps for Filing ITR-2:**

1. **Personal Details:** Fill in the basic personal details including PAN, address, etc.
2. **Income Details:**
- Enter the salary income as zero.
- Report the exempt income (₹50 lakhs) in **Schedule EI**, under sl. no. 5.
3. **Interest Income:** Report the interest income of ₹12,000 from the Savings Bank Account under the applicable section for "Income from Other Sources."
4. **Schedule TR:** Since there is no claim for foreign tax credit, you do not need to fill out this schedule.
5. **Verification:** Ensure all details are correctly entered, and verify the return before submission.

### **Conclusion:**

- **Show Salary Income as Zero** and **exempt income (₹50 lakhs)** in Schedule EI.
- **Schedule TR** is not applicable in this case as there is no claim for foreign tax credit.
- **Interest Income** should be included in "Income from Other Sources."

By following these steps, you should be able to correctly file Mr. X’s ITR-2 in accordance with the tax laws and the provisions of the DTAA.