Resident Indian on Deputation in India

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2011 Hello,

I work for a company in UK for last three years. About an year back my company sent me to India on long term deputation to suppliers place. I am getting paid in UK and TAX and NI are deducted at source in UK. As per my company sources India has a DTAA and I don't have to pay tax again in India. I have consulted couple of CAs here in India and they suggested the same. Now my company want me to continue here for another year. I am not paying any tax here in India. how long can I work in this mode?. Is it true that if I pay tax in UK I don't have to pay again in India?.

Any help would be greatly appreciated.

Thanks,
Avbrao

Jainish shah

Jainish shah (Expert)
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15 March 2011 Hello sir,

1st question I want to ask,are you of Indian origin?
2ndly, if you satisfy all the condition prescribed to have ordinary residential status then and then only you will have to think about tax in India. Otherwise not.

In summary, if you stay in India not more than 730 days during 7 years immediately preceding the previous year and at least 2 years out of last 10 years you have been a person as ordinary Indian Resident.

So first you have to decide your residential status in India. Then if you prove to be ordinary indian resident, then and then onlt you have to think about tax in India. otherwise you are not taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

15 March 2011 Hi, Thanks for your response.

Yes! I am from Indian Origin. Upto Feb 2008 I am India working for various Firms. I have travelled to UK on Tier 1 Visa and joined a UK company. Since Jan 2010 I am back in India on Deputation for the same company. They wanted me to go back to the role in UK after the deputation period.

Thanks,
Avbrao

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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21 July 2025 Thank you for the detailed context. Let’s clarify your tax residency status and taxability in India under the Income Tax Act, 1961 and the India–UK Double Taxation Avoidance Agreement (DTAA).

✅ 1. Determining Your Residential Status in India
Since you are in India from January 2010 onwards, your residential status for Indian tax purposes depends on your physical stay in India:

As per Section 6 of the Income Tax Act, 1961, an individual becomes Resident in India if:

They stay in India for ≥ 182 days in a financial year OR

They stay ≥ 60 days in a financial year AND ≥ 365 days in the preceding 4 years.

Since you’ve been in India from Jan 2010 through the current year, you are very likely to qualify as a Resident and Ordinarily Resident (ROR) by now (especially if you’ve been in India for at least 730 days over the last 7 years and at least 2 years as a resident in the last 10 years, which seems likely).

✅ 2. Taxability of Foreign Income
As a Resident and Ordinarily Resident (ROR):

Your global income is taxable in India, regardless of where it is received or taxed.

This includes the salary you are earning in the UK, even if it’s taxed there.

However, since India and the UK have a DTAA, you can claim a credit in India for the UK taxes paid, under:

Section 90/91 of the Income Tax Act, and

Through Form 67, filed before or along with your ITR.

So no, paying tax in the UK alone is not enough, if you’re resident in India. You must:

Declare this UK income in India

Claim foreign tax credit (FTC) to avoid double taxation

✅ 3. How Long Can You Work in This Mode?
Legally, you can continue to work in this deputation mode, but for tax purposes, your continued stay in India shifts your tax residency status and brings foreign income into the Indian tax net.

Your current arrangement (being paid in UK with UK tax deducted) is not compliant with Indian tax law if you are ROR — unless:

You declare that foreign salary income in India, and

Claim FTC for UK taxes paid.

✅ 4. What You Should Do Now
Check exact days of stay in India since FY 2009-10 to confirm ROR status.

If ROR:

Include UK salary in Indian ITR

File Form 67 to claim tax paid in the UK as a credit

If you are still a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR):

Foreign income is not taxable in India, provided it is not received in India.

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