taxation of non resident

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paresh zatakia (Querist)

10 February 2011 Dear Colleagues
I would reuest to help me on following querry
MR.A is an Italian citizen working in India with a Pvt. LTD. Namely B LTD.
Company which is WOS of an Italian Company. Prior to this MR.A was an employee of the parent company.
He is given employment visa for six months at a stretch. His stay in india during financial year is more than 300 days.
His salary is Rs. 12 lacs p.a.
Tax on the same is to borne by the B LTD.
1)will he be considered to be resident?
2) Can he get benefit of basic exemption & tax slabs?
3)can he get benefit of deductions u/s 80C?
4) WHAT WILL BE THE TAX B LTD HAS TO PAY FOR 10.11 FOR MR.A.?
regards
c.a.paresh zatakia
9833855518

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)

11 February 2011 1) Yes, he is resident becuase he stayed more than 182 days in previous/financial year.

2) yes, he can get benefit of basic exemption & Tax slabs but whether he is female or senior citizen, this is immaterial therefore basic exemption & tax slabs will be applicable to normal individual, i.e., Basic exemtpion for p.y. 2010-11 is Rs. 1,60,000

3) Yes, he can get benefit of deduction u/s 80C & all other deductions.

4) You will have to do comutaion here. Let's assume that after all deduction his salary is Rs. 12 Lakh P.A. therefore as per slab tax rate tax will be:
Slab Taxable amt. Tax % Tax
160000 500000 340000 10% 34000
500000 800000 300000 20% 60000
800000 1200000 400000 30% 120000

Therefore, Total Tax Rs. 2,14,000(excluding cess). Now, becuase this tax paid by B Ltd. on behalf of Mr. A, therefore this tax amount will be also part of his salary and now tax will be computed on Aggregate of Rs. 14,14,000.

Regards!!!

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