Determination of residential status

Tax queries 373 views 3 replies

Priya

Manager

35 Points Posted on 30 July 2014

Dear Sir,

My friend is an employee of an Indian comapny who is currently working in Dubai on an assignment.The assignement is likely to extend into the next couple of years.

Abroad he is paid only the daily allowances in foreign cuurency and continues to draw salary in India in Indian currency.

He has been outside India during last year for more than 182 days.

However given the fact that he is still in employment with the Indian company and has moved out of India only for a definite period of time, say for a couple of years/until completion of the project would he need to file his returns in India as NRI or can he continue to maintain resident status.

Also in either case please clarify on the taxability of the allownces received outside India. Would it be exempt in India.

Thanks in advance.

Replies (3)

Anubhav

Chartered Accountant

429 Points Posted on 30 July 2014

Hi,

Your assessee is resided in India for less than 182 days in the previoys year.

The second condition of sec 6(1) stands redundant in case of person going out for employment.

Hence he will be said to be a Non Resident.

Now your scond question is about taxability. His foreign income will not ba taxable in India.

AJH & Co

9868729930

Hitesh Khanna

Accounting & Finance Taxation Company

839 Points Posted on 30 July 2014

In your Case whether your friend is a REsident or Not Shall be judged from the his period of Stay in India In the Previous Year.

If his period of Stay in India In the Previous Year is 182 Days or More, he shall be Concidered as an Ordinary Resident In India.

1. He shall File Returns in India as NoN Resident- Since his Income Accrues in India & Is also Received in India.