Income tax in India for foreign (Japan) income.

Tax queries 896 views 6 replies

Kaushik Dutta

Others

27 Points Joined December 2012

Respected CAs,

I am a software professional and was in Japan from Feb, 2012 to Nov, 2012 continuously with Japan's company's payroll.

My company used to provide me NET SALARY, with already tax deducted.

I have below questions:

1) From my limited knowledge in Income Tax rule, I can to know if in any financial year, a person is outside India for more than 183 days, then he will be considered as NRI and will not to pay any Income tax in India for the foreign income. Hence from April, 2012 to Nov, 2012, its over 183 days and hence I dont need to pay IT in India for the income in Japan. Please confirm whether my understanding is correct.

2) If (1) is yes, then do I need to show/declare the amount in my FY 2012-13 IT return?

3) Do I need to pay IT in India for Feb, 2012 and March, 2012. Because in FY 2011-12, I was outside India for less than 183 days (60 days in total)?

4) If (3) is yes, what is the provision under DTAA (double taxation), as for Feb, 2012 and Mar, 2012, I have already paid Income taxes in Japan.

5) If (3) is yes, then can I get exemption for the HRA, medical insurance etc. what I paid in Japan.?

Please help me with your valuable suggestions.

Thanks in advance.

Replies (6)

CA MANISH AGRAWAL

Practice

539 Points Joined February 2010

The Sec 6 of income tax act should applies which firstly show the status of assessee whether it is resident or Non resident .Then Sce 4 and Sec 5 applies which show soures of income or any nexus of income with india ,whether is earned directly or indirectly in india .So it very long process to calcate any foreign income .

Kaushik Dutta

Others

27 Points Joined December 2012

I am already aware (ofcource from my limited knowledge) that in my scenario...for FY12-13, I am NRI and for FY 11-12, I am normal indian resident. I also mentioned that in my previous post.

On that note, I will be grateful, if some senior CA can provide me the answers (in lay-man term) of my above questions.

Thank you once again.

Kaushik Dutta

Others

27 Points Joined December 2012

Friends, I am waiting for your feedbacks/inputs. Plesae provide your thoughts.

Thanks in advance.

CA Mukesh Kedia

Chartered Accountants

44 Points Joined June 2010

Originally posted by : Kaushik Dutta
	As per my updates if assessee in any relevant FY is NRI as per IT Act then inome from abroad shall not part of Taxable income in India. In your case it you resides more than 60 days in india (Dec 12 to Mar 13 ) in relevant P.Y and was in india for more than 365 days in last 4 previous years relevant to the current p.y.Thus your abroad income shall part of taxable income in india.In income tax there is provision of double taxation relief by way of rebate for any tax deducted on foreign income in abroad.

Kaushik Dutta

Others

27 Points Joined December 2012

CA Mukesh Kedia - I think you are not completely correct.

As being an Indian citizen, I was employed outside India, hence the 60 days will be extended to 182 days.

As a result as I was outsde India from Apr, 2012 to Nov, 2012 (more than 182 days) and in India from Dec, 2012 to Mar, 2013 (less than 182 days), I will recognised as NRI.

Senior CAs kindly please confirm.

(1) An individual is said to be resident in India in any previous year, if he—

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or

(b) ⁴⁵[* * *]

(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

⁴⁶ [Explanation.—In the case of an individual,—

(a) being a citizen of India, who leaves India in any previous year ⁴⁷[as a member of the crew of an ⁴⁸ Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;