Salary

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KIRAN KOTAK (Querist)
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31 October 2014 We have an employee located at Doha - Qutar (middle East). He is on our payroll and wants salary to be deposited in his account at Doha directly. Since his work is for Doha client in Doha, Will his salary will be taxable in india?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 October 2014 As he is non resident and rendering services out side India and receiving salary outside India, he is not taxable in India.

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KIRAN KOTAK

KIRAN KOTAK (Querist)
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31 October 2014 will this not be treated as service rendered to Indian company and thus it deemed to accrue in india?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 October 2014 If the salary is deposited in India then the deeming provisions will apply, however The place where the services were rendered was the place of accrual for the salary—since the services were rendered abroad, the salary, too, accrued outside India. Addressing the tax officer’s contention that the salary was taxable in India as it was received in India, the tribunal took the view that “receipt” has to be considered in the context of the first occasion when the taxpayer gets control of the money—real or constructive control. Therefore, what is material is the receipt of income in its character as income, whether by the taxpayer or by his agent. There cannot be more than one receipt of income, and the same income cannot be taxed on multiple occasions.

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KIRAN KOTAK

KIRAN KOTAK (Querist)
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31 October 2014 thank you for your reply.

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