Double tax arrangement

Hi,

If Mr. X, a salaried employee has been in US for past 6 yrs and has come back to India in Aug-2011, by which he becomes a resident of India. Question is whether he has to pay tax in India even for the income earned by him in US till Aug-2011?

What would the answer be if he has already paid tax for the five months i.e., form April to July-2011 in US?

Replies (2)

The important test here would be to determine the individual's residential status for the tax year 2011-12, if the individual satisfies one of the basic conditions (i.e. 182 or more stay in the tax year 2011-12 or 60 or more days stay in current tax year and 365 or more stay during the 4 preceding tax years in India) and both the additional conditions (i.e. Resident in atleast 2 out of 10 preceding tax years in India and aggregate stay of more than 729 days in preceding 7 tax years) laid under Section 6 of the Income tax Act.  The individual would qualify as a 'Resident and Ordinarily Resident' (ROR) and only in such a scenario would be taxable on his global income.

If your assignee, qualifies as 'ROR' for the tax year 2011-12, then he will be taxable on his global income including income from USA.  However, he should be able to claim credit for the taxes paid in the USA on his India tax return as per the computation mechanism laid under the India- USA double tax avoidance treaty.

Note, if the assignee qualifies as 'Non-Resident' or "Resindent but not Ordinarily Resident' for the tax year 2011-12, then he need not declare his USA income, as his global income is not taxable in India. He is taxed only on income that is sources or accrued in India

 

 

 

Thank you :)

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
20 September 2026
Semi Qualified CA

Navin & Associates

Mumbai

CA Inter

View Details
Company
19 September 2026
Finance Manager

Mugdha Art Studio

Hyderabad

CA

View Details
Company
15 September 2026
Client-site CA associate

Aditya Muley and Co

Mumbai

CA

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details