Taxed twice on same indian income in india and usa
This query is : Resolved
30 November 2012
I worked in USA from Jan 2010 to Oct 2012 and returned to India in the month of Oct 2012. I used to receive Salary ( US allowance and Indian allowance) in dollars in USA and was taxed on this amount in USA.
I started working in India in the month of Nov 2012 and recently received the Indian salary. But I was shocked to see the Nov 2012 Payroll. Income tax for the months of April to Oct 2012 is again deducted from my payroll.
When i enquired my finance team, they told me that as per the Income tax Act, 1961; I am resident of India and hence i am taxed for the entire year 2012. Below is the residency status information that they have provided.
Income tax Act, 1961:
a. An associate is in India for 182 days or more during the current financial year.
OR
b. An associate is in India for 60 days or more in the current financial year and for 365 days or more in the preceding four financial years
My question is that why am i taxed twice on the same Indian salary? If i have to claim this income tax ( India ); how do i do it
I started working in India in the month of Nov 2012 and recently received the Indian salary. But I was shocked to see the Nov 2012 Payroll. Income tax for the months of April to Oct 2012 is again deducted from my payroll.
When i enquired my finance team, they told me that as per the Income tax Act, 1961; I am resident of India and hence i am taxed for the entire year 2012. Below is the residency status information that they have provided.
Income tax Act, 1961:
a. An associate is in India for 182 days or more during the current financial year.
OR
b. An associate is in India for 60 days or more in the current financial year and for 365 days or more in the preceding four financial years
My question is that why am i taxed twice on the same Indian salary? If i have to claim this income tax ( India ); how do i do it
MEHUL SHAH
(Expert)
01 December 2012
Avinash, as you are a resident your global income is taxable in India ie you have to pay Indian tax on total income which is salary in USA as well as INDIA. However according to Article 23 of Double Treaty avoidance Agreement, you can claim a refund of the taxes paid of USA. However only Usa federal tax can be claimed and not State tax.
In case of further query, do mail me at mehul@raseshca.com
In case of further query, do mail me at mehul@raseshca.com
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