Salary of Non Resident
This query is : Resolved
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?
23 July 2011
Firstly I would like to clarify that if an Indian employee is sent to work outside, still he will a resident of India.
Under section 5 of the I T Act, all incomes of a resident is liable to tax in India. Tds should be complied u/s 192 and not u/s 195.
Currency is not the criteria to decide on tds.
Under section 5 of the I T Act, all incomes of a resident is liable to tax in India. Tds should be complied u/s 192 and not u/s 195.
Currency is not the criteria to decide on tds.
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.
Anuj
+91-9810106211
femaquery@gmail.com
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.
Anuj
+91-9810106211
femaquery@gmail.com
Message likes :
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24 July 2011
I too agree with Mr Anuj Gupta Sir, as missed to consider the words that employee was sent outside 'for an year'.
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