Non-resident individual (Not an Indian person) wants to work in India with Company.
He will work on some conditions are as below-
Professionals, Plz guide on what are the compliances we need to do under Labour and Income tax Law.
Hi Charushila! Here’s a detailed guide on the labour and income tax compliances for a non-resident individual (not an Indian) working in India under the conditions you mentioned:
Since the individual is on a business visa, it typically does not allow employment or work in India.
For legally working in India, the individual should ideally have an Employment Visa or a Project Visa, depending on the nature of work.
Staying 3 weeks/month repeatedly might be scrutinized; ensure proper visa compliance to avoid penalties or legal issues.
If employed or deputed by an Indian company, the Indian labour laws like the Shops and Establishment Act, Employees’ Provident Fund (EPF), Employees’ State Insurance (ESI), Professional Tax may be applicable depending on the employment contract and salary structure.
Since the stay is temporary and non-resident, EPF and ESI contributions may not be mandatory, but it depends on specific state laws and salary agreements.
Employment contract should clearly specify terms including duration, nature of work, place of work, and applicable laws.
Non-resident employees should be covered under appropriate insurance policies.
The person will be considered a Resident or Non-Resident Indian (NRI) based on the number of days stayed in India.
As per Income Tax Act, an individual is resident if he stays in India for 182 days or more in a financial year or meets other criteria.
In your case, staying 3 weeks per month for 6-7 months (~21 days × 6 = 126 days approx.) means the individual will likely be a Non-Resident Indian (NRI) for tax purposes (unless stays extend beyond 182 days).
If Non-Resident, only income earned or received in India is taxable.
Income earned outside India is not taxable in India.
Salary paid by Indian company for services rendered in India is taxable.
TDS (Tax Deducted at Source) must be deducted by the employer on salary paid.
The individual must file an Indian Income Tax Return if taxable income exceeds basic exemption limit.
To claim relief under DTAA (if applicable), file Form 10F and Tax Residency Certificate from home country.
If the individual is paid outside India and is NRI, tax implications may differ.
Compliance for GST is generally not applicable for salary income.
Labour Welfare Benefits: EPF/ESI may not apply, but check state-specific laws.
Professional Tax: May be applicable if individual is considered employee.
Social Security Agreement: India has SSAs with some countries; check if it applies to avoid dual contributions.
| Compliance Area | Key Points |
|---|---|
| Visa | Business visa not suitable for employment; Employment Visa needed |
| Labour Laws | Applicability depends on contract; EPF/ESI usually not mandatory |
| Tax Residency | Likely NRI (stay <182 days) |
| Income Tax | Taxable only on India income; employer to deduct TDS |
| Tax Filing | Required if taxable income > exemption limit |
| Social Security | Check SSAs to avoid dual contributions |
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