Income tax on B1 (Bussiness) visa income

1983 views 3 replies

Jay Kumar

Sr Analyst

25 Points Posted on 03 June 2011

Hello,

My question is regarding the income Tax.

I travelled from India to US on B1 Visa for 2 months and recived nearly $55/Day as a Per Diem from my organization. when i came back to india my finance department wants me to submit the reciepts for at least $40 (for a day). As i don't have complete $40 reciept for everyday, they deducte the tax from my next month salary as settlement. i asked them why they have deduct so much amount insettlement they said the tax has been deducted on your salary. As per my knowledge we are not binded to give tax on our per diem income. Few friends of mine said there organization doen't cut these kind of taxes if you travelled on B1 visa to US.

Please let me know what is the exact rule we have for taxation. i am very much confused and puzzled with deduction.

Thanks

Jay kumar

Replies (3)

CA NITUL MEHTA

KPMG-Senior Consultant-International Tax

236 Points Posted on 03 June 2011

your employer in this case is correct as you have been in india for 10 months you become a resident of india and any income you earn in india or abroad will be taxed and if that income you are talking about is related to your salary then definatly yopu employer is correct, but check whether there is any tax you have paid on that dollor income there in US, if yes you will be able to claim some relief here or else your employer is correct in law

Jay Kumar

Sr Analyst

25 Points Posted on 03 June 2011

Thanks Nimit Sir....

But my question here is whether my Per Diem (which is not a part/related to salary) is taxable as per law. During the 2 month tenure i recieved my indian salary also.

Appreciate your reply on this......

Thanks

Jay Kumar...