Foreign National Income Tax

Dear Vikas,

It appears that she is residing in India for past 2 years, in this case her Residentail Status would be that of Resident but not ordinarily resident (RNOR)..

Since her status is that of RNOR - The following incomes will be taxable in India - 

(a) is received or is deemed to be received  in India in such year by or on behalf of such person ; or

(b) accrues or arises  or is deemed to accrue or arise to him in India during such year

(c) which accrues or arises to him outside India from a business controlled in or a profession set up in India.

Now coming to ur specific queries -

1) Benefit of Investment of Rs. 1 lcs will be available to her.

2) Now regarding ur second & third question

Look, based on facts(that consolidated remenuration) I think she is working in the capacity of "Consultant" & not as an"Employee",

Anyways if she is working as a Consultant - All legitimate expenses incurred by her shall be allowed as deduction in computing the income like travelling, telephone, books, etc..

Further, rent paid for residence can bee claimed u/s 80GG to the extent of Rs. 24,000/ annum

If she is working as an employee - No expenses will be allowed in computing the Income since u have mentioned that she is getting a consolidated pay without any breakup in respect of any allowances, etc...

Even in this case Deduction of rent u/s 80GG can be claimed to the extent of Rs. 24,000/ month

How to decide that Employee or Consultant

1) If Company is deducting PF then "Employee"

2) If Company is isuuing Form 16 to her then "Employee" & if Form 16A then "Consultant"

3) Ask the HR/Admin Guys.......

Dear Vikas,

Completely agree with Mr.Amir brother....

I also feel that she is a Resident but not ordinarily resident (RNOR)..

I think that she is working as a consultant .....

Therefor,

Benefit of Investment of Rs. 1 lcs can be utilised...

She can claim all legitimate and legal exp incurred by her and she can also go for 80GG ded for Rent paid...