Tax on Salary of Non-residents

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Chitra Nair (Querist)

17 November 2009 Is the computation of salary of Non-residents done same as that of residents. Are there any special points to be kept in mind. Are all allowances taxable? Please do clarify.

Sunil

Sunil (Expert)

18 November 2009 Computation of Salary for Non Residents on which you have to make the TDS is the same as for the Residents. Deduction Under VI-A is available only to Non Resident Indian and that too not on the investment income and capital gains etc. Usually NRIs claim these deductions on salaries earned prior to leaving India. All allowances are taxable the same was as for resident individual whether Indian or Expat.

For expats you have to also add the additional salary or compensation paid by the parent company deputing him to India for the period he is working in India for the PE. If he becomes resident on account of number of days in India in the relevant previous year, then his entire salary abroad and in India is taxable in India and relief is allowed for the taxes suffered in his country. He is allowed relief for Indian Taxes suffered on his salary taxed in India (incl. what is taxed on his receipt abroad) if he has to file returns in his country of residence.

Chitra Nair

Chitra Nair (Querist)

18 November 2009

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