22 July 2011
If a Pvt. Ltd. Company sends employees outside India for an year to do project work and Salary is paid in India in INR, Whether the salary is Taxable in India?
24 July 2011
I differ from the statement"if an Indian employee is sent to work outside, still he will a resident of India"
The residence in India is defined under section 6 of Income Tax Act and is determined by physical presence of person in India for more than 182 days in the previous year or 60 days in previous year and 365 days in 4 previous years prior to the relevant previous year.
The salary should not ideally be taxable in India as the income accrues outside India at the place where services have been rendered.However the Income Tax Officer shall argue that since the salary has been received in India , hence the same shall be taxable on receipt basis u/s 5 of Income Tax Act.
There are case laws in favor of assessee but the issue shall be needed to be resolved at a higher level than the ITO.
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