The person is working with shipping companies.So his residential status for fy 08-09, 09-10 is non resident.
His salary ceritificate issued by indian shipping companies is showing Rs. 65 lacs deposited by the shipping company in the NRE account. and TDS is deducted by the bank on the same.
Whether this amount needs to be shown as income in the return of income.
He was resident for the earlier years.
Kindly let me know.
Dear Hetal,
| Account Type | NRE | NRO |
| Currency | INR | INR |
| Purpose Of Account | NRE Accounts are used to hold overseas savings remitted to India after converting to INR | NRO Accounts are used to hold Indian income like rent, dividend etc. |
| Repatriation | Fully repatriable | Only interest on NRO account balance (after deducting TDS) |
| Types Of Account |
Savings Bank Account Fixed Deposit Account |
Savings Bank Account Fixed Deposit Account |
| Tax | Fully exempt | 30% tax deducted at source |
| Local rupee funds | Not allowed | Can be deposited |
| Advantages | Rupee account with full repatriation | Account for local Deposits |
| Joint Holding Facility | Only with NRIs | Both with Resident/Non-Resident |
Source - remit2India.com
Dear Hetal,
A similar question arose before the Gujarat high court in the case of CIT Vs. Avtar Singh Wadhwan (247 ITR 260) (Bom.). The Court held that in order to determine that whether the income accrued or arose in india it is the where the services are rendered is relevant and not the place where the contract is executed and the fact that payment is made by Indian company is also not relevant. Since in your case the contract of employement is executed in India but services are rendered outside india (Section 2(25A) which defines the term "India" does not cover foreign-going Indian ships) hence income would not accrue in India and thereby not taxable in India.
Regards,
Chintan.
Triveni Turbine Limited
Bengaluru
CA
View Details
CAclubindia
