Tax rebate on income earned in foreign country

This query is : Resolved

Sharib (Querist)
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13 February 2012 Hi,

I am an IT professional, in an year, I stayed in Singapore for 4 month and earned money there, My total taxable income is calculated as :

Indian Taxable Income + Income in Singapore(Converted to Rupee)

And tax due was computed as

Tax Payable in India = Tax on total income(India + Singapore) - Tax paid in Singapore(Converted to Rupee)

Now, I just want to check when I am in Singapore I have some expenses for which I will be getting rebate in India, for example HRA, Here in Singapore I am paying huge amount as rent and would like to know if I can get rebate in tax for this amount paid, Also, in order to get this benefit, what all documents will be required.

Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 February 2012 HRA is being received from an employer by earmarking the amount as HRA.
.
From the query it seems that you have worked as an IT professional, means you have carried on business there.
.
In respect to your business,in India as well as outside India, you can claim expenses including the rent paid, Travelling expenses incurred, and other incidental expenses like local conveyance, mobile expenses etc.
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You have to consult another IT Professional. Here IT stands for Income Tax.
.

Sharib

Sharib (Querist)
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15 February 2012 Sir Thanx for reply, I am in software field, initially i was placed on business where i was eligible for per day allowances, but after 10 days, I got transferred to Singapore payrol, and I am drawing singapore salary. Last year also I was in Singapore for 3 months and tax was levied on my singapore income as per calculation given above.
Can you please help me by providing information that if I am on salary in singapore, then whether I will be able to enjoy Tax benefit for Rent paid in Singapore.

Regards,
Sharib Amin

Sharib

Sharib (Querist)
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Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Thanks for sharing the detailed scenario. Here’s a clear explanation about tax rebates or deductions on **rent paid in a foreign country (Singapore)** when you are an Indian resident earning salary abroad:

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### Key points:

1. **Residential Status & Worldwide Income**

* If you are a **resident** of India for tax purposes, your **global income** (India + Singapore salary) is taxable in India.
* You have to declare your Singapore income in Indian return and pay tax after credit for tax paid in Singapore under the **Double Taxation Avoidance Agreement (DTAA)**.

2. **Can you claim HRA benefit for rent paid abroad?**

* **HRA exemption under Indian Income Tax Act is only applicable on HRA allowance received from your employer in India.**
* If you receive **salary in Singapore payroll**, generally there is **no Indian HRA allowance** component. Hence, **you cannot claim Indian HRA exemption** on rent paid in Singapore in this case.
* Simply paying rent abroad **does not automatically entitle you to HRA exemption or rebate in India** unless the salary structure explicitly has HRA component from Indian employer.

3. **Can rent be claimed as expense against foreign salary?**

* If you are a **salaried employee**, you **cannot claim rent as a deduction** from salary income under Indian Income Tax.
* If you were carrying on business/profession in India and abroad, then rent and other expenses could be claimed as business expenses.
* Since you are drawing salary in Singapore, no deduction is allowed for rent paid there against your salary income.

4. **What deductions can you claim for foreign income?**

* You can claim **foreign tax credit** for tax paid in Singapore, as per DTAA.
* No deduction for rent paid abroad unless you receive HRA from Indian employer on which exemption is claimed.

5. **Documents you should maintain:**

* Rent receipts from Singapore landlord.
* Lease agreement (if any).
* Salary slips showing whether any HRA is paid from Indian payroll (if applicable).
* Tax payment proof for Singapore income tax paid.
* Employment contract and salary breakup.

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### Summary:

| Scenario | Tax Treatment in India |
| ------------------------------------------------------ | -------------------------------------------------------------------------------------------- |
| Salary drawn from Singapore payroll, no HRA from India | No HRA exemption on foreign rent paid; full foreign income taxable, minus foreign tax credit |
| Salary includes HRA from Indian employer | Eligible for Indian HRA exemption on rent paid (subject to conditions) |
| Carrying business/profession activity | Rent and other expenses may be claimed as business expenses |

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### Recommendation:

* Since you draw salary on Singapore payroll, **you are not eligible for HRA exemption** on rent paid there under Indian tax law.
* However, ensure you **claim foreign tax credit** for Singapore taxes paid to avoid double taxation.
* Consult with a tax expert with details of your salary structure and payroll to explore any other benefits.

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If you want, I can help draft your tax return notes or assist with foreign tax credit claims. Would that help?

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