Foreign posting - tax in India

666 views 4 replies

Manoj Gupta

General Manager - Sales

27 Points Posted on 14 January 2011

I had sent a PM to Juzer. Have now copied and pasted his reply. Will seek more clarifications through this thread.

Thanks Juzer

Subject : Your Queries

Message :
There is DTAA between India and Swiss for rules refer Article 15(2) (refer https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_Swiss_Confederation.htm) Ans to ur queries: I understand that your stay in Calander year 2010 does not exceeded 183 or more in Swiss and so you may qualify for Article 15(2) benefit and hence Tax shall not be deducted @ source from ur swiss income for concerned year provided you satisfy condition "b" & "c" of Article 15(2). Further, for Calander year 2011, I believe you wont be staying more than = 183 days is swiss and also if, you satisfy condition "b" & "c" of 15(2)then your Slary shall not be chargeble to Tax in Swiss. Now, as there is TDS in Calender year 2010, if you satisfy conditions of 15(2) you may be allowed tax refunds from swiss gov for concerned year. In India, for F.Y. 2010-11, I understand your stay in India is not more than equal to 182 days and purpose of your stay outside India is for Employment (refer Section 6 of Income Tax Act 1961). Hence you shall be regarded as Non resident and may not be chargeble to tax w.r.t. Income earned/recieved outside India. For F.Y. 2011-12, I understand you will be resident in India and Swiss income shall be taxable in India. Incase there is TDS on swis Income, you shall be eligible for Tax credit as per Article 23 of DTAA. Regarding your taxability of your pension I will come back to you. Request you to post your queries in forum which will help me to give better presentation while responding

Replies (4)

U S Sharma

glidor@gmail.com

21068 Points Posted on 14 January 2011

but where is query?

Manoj Gupta

General Manager - Sales

27 Points Posted on 17 January 2011

Dear Juzer,

Can you believe it, I cannot find my queries. Can you please post them on this thread. I am now ready with 1-2 more questions

Manoj Gupta

General Manager - Sales

27 Points Posted on 17 January 2011

Query :

1. Still wait to know what happens to the withdrawl of pension / pf funds in Switzerland. I read the rules and it is clear that once I move out of Switzerland, I will be able to withdraw my PF/Pension contributions made in Switzerland. What is not clear is will this be Taxable in India?

2. I was posted in Switzerland from 10.10.10. Prior to this I travelled to Switzerland many times during the fiscal year on a business visa (not a work permit). Will these days on business visa be counted towards the computation of 183 days or is it purely the days from 10.10.10 to 31.03.2011 (this comes to 182 days)

3. My family was in India at this time. I didnot have a salary paid to me in India. Will I be able to claim HRA benefit as the rent was paid during this time in India by my family.

Await reply

Best regards

Manoj

Manoj Gupta

General Manager - Sales

27 Points Posted on 17 January 2011

FOUND THE FIRST MAIL OF QUESTIONS!! POSTING NOW

Dear Juzer, I read your fantastic explanation to Girish on the foreign employment tax liability. While almost everything is clear, I still put down my questions :

Work Status :

1. I work for an Indian company and was sent on deputation to Switzerland on 10.10.10 (what a date!!!) to the branch office in Switzerland. The deputation was supposed to be for 1 year. However we have mutually agreed to cut this down and I should be returning to India in the first week of March 2011 and continue to work for the company in India.

My Questions : Is there a DTAA between India and Switzerland and are the different rules listed by you for UK, the same in the agreement with Switzerland?

1. I was paid salary in India till 10.10.10, and in Switzerland thereafter - say till end Feb or if the company agrees - till 31.03.2011. This should bring my no. of days of salary paid in Switzerland to 182 days - 11.10.10 to 31.03.2011.

2. Prior to 10.10.10, I did travel frequesntly to Switzerland in the FY, but on a business visa - and salary was paid in India - I got the normal travel / out station duty expenses. Will these trips be counted towards the NRI status or not? total stay in Switzerland between 01.04.2010 - 09.10.2010 was approximately 90 days.

3. There has been a TDS on my salary in Switzerland. Can I claim a refund in Switzerland considering that from 10.10.10 - 31.12.2010 my stay in Switzerland is less than 182 days?

4. When I return to India, I would transfer my savings to India- including contribution to pension funds etc, made in Switzerland. These are normally refunded by the Swiss authorities. Will these be considered as income and be taxd too?

5. If the transfer of funds is made in the April 2011, will the income be counted for 2011-12, when transferred or 2010-11, when it was actually earned. I hope you will answer these queries. I alsohave a few other questions which I will ask after your response.

Best regards

Manoj Gupta

11/01/2011 17: