Foreign income tax query

Tax queries 947 views 11 replies

Hi, i basically require some info about foreign income tax calculation . I am a resident of India and i have worked in Australia for a period of 168 days for the present financial year , so will my income transferred into indian bank ac be taxed in India as well ? If yes , can i avoid this tax by staying out of India for more than 182 days , any info will be greatly appreciated .

Replies (11)

There is no scope of avoiding tax on salary received in India, both in case of Resident and Non-Resident. 

Dear Sonam , the salary was actually received abroad from a foreign company , only transferred later to indian bank ac , so if i stay outside india for more than 182 days , i am considered a non- resident , and foreign income tax payment in India would not be required , is that right ?

I forgot to ask you the basic question : Whether you are Resident and Ordinary Resident of India (ROR)

                                                           Resident and Non Ordinary Resident of India (RNOR)

                                                             Non-Resident?

In case you are ROR or RNOR, any income accrue or arise outside India will be taxed in India, even if you received that income outside India.

In the last case only, tax willl not be levied.

 

 

I have only worked abroad(Australia) for around 167 days in the present year , before that , i was working in India since the last 9 years , that makes me resident of india ?? , but from what info i have gathered , if i stay outside India for 182 days in the current financial year , then i become non-resident and i dont have to pay tax on foreign income , is that correct ? thanks in advance .

Yes.....you are correct, if you wil stay outside India for more than 182 days, then you need to pay tax on your salary income.

AS PER SECTION 6 OF IT ACT IF THE ASSESSEE IS IN INDIA FOR A PERIOD OF 182 DAYS OR MORE THAN HE IS CONSIDERED AS RESDIENT AND ALL THE INCOME WILL BE TAXABLE IN INDIA WHETHER SUCH INCOME IS EARNED IN INDIA OR OUTSIDE INDIA. (THIS CONDITION IS APPLICABLE ONLY WHEN THE ASSESSEE LEAVES INDIA FOR THE PURPOSE OF EMPLOYMENT OUTSIDE INDIA)

 

IF THE ASSESSEE IS IN INDIA FOR LESS THAN 182 DAYS AND HE IS OUTSIDE INDIA FOR EMPLOYMENT PURPOSE THEN THE INCOME EARNED OUTSIDE INIDA WILL NOT BE TAXABLE IN INDIA EVEN IF THE INCOME IS DIRECTLYTRANSFERED TO INDIAN BANK NRE ACCOUNT.

 

 

 

Just to confirm , If i qualify the criteria - "IF THE ASSESSEE IS IN INDIA FOR LESS THAN 182 DAYS"  for year 2011-2012  ,  but -

1. i have transferred funds to my indian ac (owned by resident indian )

2. i have been working in India for all previous financial years before 2011,

       I still dont pay tax on foreign income ?

 

Yes. There is no tax liability for that year.

thanks a lot , no more questions for now ....

Also , is the foreign income also taxed in the same manner as income earned in india , based on the current year tax slabs , is there any tax relief on such income ? if yes , could someone pls guide me how to calculate tax on foreign income . Thanks .

Dear Kunal, 

I appreciate your using Caclubindia site. But i would rather suggest you hire a CA for your tax planning (in case you dont have one), since you seem to have good business and must be liable to file income tax returns regularly. 

It would be more helpful if you sit and discuss with a CA.

Thanks :-)

 


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