Tax on salary in india and australia

Tax queries 2819 views 13 replies

Hi,

I am a Software engineer from India. I was in India till November 2011 as my company's India employee. Then I moved to Australia for my company from Dec 2011 till date as Australia employee. I do not receive salary (no payslips even) from Indian company as Indian employee from Dec 2011 since am an Australian employee. But I receive yearly bonus from Indian company and payslip for that as well. 

 

I pay tax in Australia for my Australian salary from Australian company and I am lodging tax returns in Australia as well. Currently my Australian salary is taxed apart from allowance called LAHFA. 

 

Should I pay tax again for my Australian salary in India for the period Dec 2011-March 2012 ? If so, should I pay for the net Salary or salary apart from the allowances ? 

 

I heard I should pay tax in India for Australian salary if I lived in India for more than 180 days in the financial year. But I also heard that I should pay the tax in India only if I receive salary or bonus or any pay from my Indian company.

 

I am really confused. Kindly help me.

 

Thanks,

Venugopal H

 

Replies (13)

If you have received Australian income in Australia, not in Indian Bank. Then it is not taxable in India. You need not to pay income tax in India for the Australian income.

If you was live in india for more than 182 days in india in relevent f.y. of which income is concerned then you are Recidence in India, and you have to pay tax in India.

you were resident in India during 2011-12 as you stayed in India for more than 182 days. Your worldwide income is taxable in india . you may claim relief under DTAA in your return to be filed in India.

I agree with Sudarshan subject to your residential status is Resident and Ordinarility Resident. If your residential status is Resident and Not Ordinarily Resident, then it is not taxable.

Thanks Sandeep, Sudharsan and Vineet for the reply.

 

My Monthly salary in Australia = Basic PAYG amount + LAFHA (allowance). Australian Taxation office considers only Basic PAYG amount for individual tax and I am paying that amount here.

 

Should I pay indian tax to my monthly salary deducting tax paid in australia or indian tax to  PAYG amount only after deducting tax paid in australia? 

 

Thanks again.

Hi Venugopal,

1. For the FY 2011-12, You have to file IT Return in India for the income received in India as well as in Australia as you stayed in India for more than 182 days. Your globle income is taxable in india and you may claim relief under DTAA in your return to be filed in India

2. In respect of PAYG amount, you have not mentioned the year of receipt.

If it is received during FY 12-13, U need not pay Indian Tax since you status will be Resident but not ordinarily Resident. 

Thanks Subhash. My query is for FY 11-12. Should i pay india tax for australian allowance as well ? Allowance is not at all taxed in Australia. 

 

Thanks again.

What u mean by PAYG?. what is the nature of allowance? when you are sending query please give the details of income in detail which should be understandable everyone. 

PAYG amount is the income which is taxed on individual earning. Allowance is LAFHA (Living away from Home Allowance) which is exempted from tax. 

 

My monthly salary - Basic PAYG amount + LAFHA allowance

 

Thanks.

Then PAYG is also taxable under Indian Income Tax. U have to compute the Indian tax and after you can deduct the relief claim for the tax paid in Australia. Relief claim will be as per DTAA. 

Subhash, as per the posts in this thread, I understand PAYG is taxable in India. I would like to know whether the allowances are taxable in India. 

 

Thanks again.

Dear Venugopal,

Allowances are taxable in India.

Since you are resident in India for FY 11-12, All your income is taxable in India (Income earned globally).

Fist you should compute your total global income for the FY 11-12.

Then Compute tax as per Indian Laws.

From the Indian Tax arrived above deduct tax paid in Australia as per DTAA

Thanks Manjunath for the info. 


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