What is income from business controlled from India?

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AJAYI (Querist)
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04 December 2024 If an NRI is employed in USA for a US company for salary and lets say later it turns out that the US company is controlled from India, Is that income considered income from business controlled from India for the NRI?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 For the employee, it is salary earned in US.

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AJAYI

AJAYI (Querist)
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04 December 2024 Thank you. So it cannot be classified as income from business controlled from India. It is classified as employment income since there is a employee employer relationship and for business income it has to have no employee employer relationship?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 Yes, the company is controlled by an Indian company not the employees directly.

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AJAYI

AJAYI (Querist)
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04 December 2024 Actually, I was referring to the deemed residency clause.It says to consider income from business controlled from India. So the salary is not going to be business income for the employee, But a employment income.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 Yes, check your appointment letter for confirmation.

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AJAYI

AJAYI (Querist)
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04 December 2024 Thank you so much sir. I am an employee for this US company. Since my salary is arisen for work in USA and paid by the US company, It should be foreign income not taxable in India. But when I looked at the deemed residency clause, I was confused as it is salary but an income from a company from controlled from India and as such if I should consider it as an income from business controlled from India which has a threshold of 15 lakh. But from your answers it looks like only business profits etc are considered business income and only business income from business controlled from India should be considered for this clause. Thank you very much.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 The deemed residency could have applied only if you were not taxed in US for the salary earned in US by employee of the company which itself is taxed in US. So, rest assured if you are NRI as per IT act, 1961; your foreign income including the salary earned in US in not taxable in India.

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