Taxability of pension received by a non resident in India

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Guest

Guest (Querist)

27 November 2009 Hi Friends, I have a doubt. Suppose Mr.X , a non resident, receives pension income from his ex-employer from London. The pension income is deposited by the employer directly in Mr. X's A/C in a Bank say Standared Chartered Bank in India and it is not deposited in any bank account in London. The pension income accrues and arises from London.My doubt is that whether the pension income credited to Mr.X's bank account in India is taxable in India as income of non resident received or deemed to be received in India????Also please give relevant IT sections and case laws if possible...Since the non resident is not having any bank account in London, it is deposited in his account in India. So can any relief be claimed for the same??????

Guest

Guest (Querist)

27 November 2009 Friends One more Kind request...Pls give me the applicable sections and case laws too if possible to justify ur answer..It will help me to an great extent

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 November 2009 Under section 9(1)(iii), pension accruing is taxable in India only if it is earned in India. Pensions received in India from abroad by pensioners residing in this country, for past services rendered in the foreign countries, will be income accruing to the pensioners abroad, and will not, therefore, be liable to tax in India on the basis of accrual. These pensions will also not be liable to tax in India on receipt basis, if they are drawn and received abroad in the first instance, and thereafter remitted or brought to India.

It is only in cases where in pursuance of a definite agreement with the employer or former employer, the pension is received directly by the pensioner in India that the pension would become taxable in India on receipt basis.

Guest

Guest (Querist)

27 November 2009 Thanks for ur reply sir but my doubt is that see the pension is NOT AT ALL RECEIVED ABROAD by the non resident but the ex employer has DIRECTLY DEPOSITED the pension in the Non Resident Indian's savings Bank A/C maintained in a bank in India say HDFC bank..so will it be treated as income received by the non-resident in India and taxed on receipt basis???Pls also quote relevant sections and case laws applicable here..Thanks in Advance

Guest

Guest (Querist)

27 November 2009 u see section 9 talks about Income deemed to accrue or arise in India.This pension does not accrue or arise in India..But since it is deposited directly in his bank account in India, will it be taken as income which has been received or deemed to have been received in India and taxed???? Cos u see for a non resident these following are criteria to tax his income in India :

1. Income received or deemed to be received in India.

2.Income accruing or arising or deemed to accrue or arise in India.

Ya, i know that it doesnt satisfy the 2nd criteria but does it satisfy the first criteria cos it is not received by him directly in India but the income is deposited in his bank account in India so can it be taken as income received or deemed to received in India.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 November 2009 The pension earned and received abroad will not be chargeable to tax in India if the residential status of the pensioner is 'non-resident',it will be so chargeable if the residential status is 'resident and ordinarily resident'.

Guest

Guest (Querist)

28 November 2009 Sir, Read my post once again and reply.The pension accrues in London.But the ex employer in London deposits the pension in the non residents Bank account maintained in INDIA directly.It is not a case where the non resident has received it abroad and brought it in INDIA. NOR THE EX EMPLOYER deposited to non resident's bank account in other country but to his bank account maintained and operated in India..SO WILL IT BE TAKEN AS INCOME RECEIVED IN INDIA?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 November 2009 Taxable vide my observation in para 2 of first reply.

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