Income tax on salary received in foreign currency

 If a person  takes up a employment with foreign company and receives salary in FC . Person visitis foreign country only for 3-4 months in a year (Not continuous ) .

The foreign compnay is having representative offices in India and head office in UK

What is the tax liability in India or abroad (say UK) ?

Please throw some light on the tax issue

 

 

Replies (3)

The tax liability on the world income including the income earned in India depends upon the residential and ordinarily resident status of the assessee.  If the assesse is an Resident individual then he income earned from foreign soruces plus the Indian income would be taxable in his hands.  If the person is a non-resident then only the Indian income earned in India would be taxable.

A person is said to be resident in India if

An individual is said to be resident in India in any previous year, if he—

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or

(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

A person is said to be "not ordinarily resident" in India in any previous year if such person is—

(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or

(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.]

Thank u very much -

 

But  My doubt is if the Paying country  say UK also deducts Tax  on the salary paid in FC .  Is that same income will be taxable in India . Considering the person is resident in India.

Yes if you are a resident then your income earned in UK shall be taxable in India.  However you could get the Tax Credit of the TDS made by the foreign country depending upon the DTAA between India & the foreign country.

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