Taxability of Foreign National

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Christie (Querist)

09 May 2010 Hi
1. If a foreign national comes to India in deputation and subsequently becomes a Resident but not ordinarily resident, receives a lumpsum amount from his foreign employer, is it taxable in india. If taxable, under what head?

2. If he files his incometax return in India for the amount received as above, what about the other amount received in his home country?

3. Does he have to file income tax return in India as well as in his home country, or he can file one return declaring his global income?

4. When is DTAA applicable?

Request to please clarify the above doubts

Thanks
Christie

CA. RAJESH Kr. MAURYA

CA. RAJESH Kr. MAURYA (Expert)

11 May 2010 Well Christie.. you have not mentioned the country you belong to, based on which it would have been easy for me to comment.

Even then let me try to clear your doubts, Salary in India is taxable if service is rendered in India, and as salary.

You have to account for only that income which you earn here, no other income out of country comes under Indian Income Tax. Income earned in your home town would be treated as per your local laws..

There is no as such global return, what all can happen is that if there is DTAA agreement in both country one may exempt from the burden of return filing. Otherwise, you will be governed by laws of both country. And in respect of India, you need to file return.

DTAA is applicable only when there is agreement between two countries to facilitate or promote trade/commerce and reduce tax burden and its compliances.

Any specific comments can be given only after perusal of exact detail.

Best Regards......

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