OCI card holder - Income tax and remote working

877 views 2 replies

Jai Shankar

3 Points Joined March 2023

Hello,

Can you please advise.

I am a British Passport holder and have a OCI card.

My employer in the UK deducts tax at source (PAYE) monthly for salary payments for the tax authorities here. I am considering to work from India remotely for my British employer to be close to my family. I have been reading the guidance on internet but still unable to class my residence status for income tax in India.

From what I understand I can visit (including working in India due to OCI card) for upto 180 days in a tax year (April - April). Can I do this every year, say between Jul - Dec (less than 180 days)? So say for example, year 1 under 180 days, year 2 under 180 days,year 3 under 180 days,year 4 under 180 days and year 5 under 180 days?

I have read something about not being over 60 days in the previous tax year and not exceeding over 365 days in the last four years but this is not applicable for OCI card holders.

If you are able to advise what is the maximum I can stay in India in my circumstance without incurring tax that would be greatly appreciated!

Thank you.

Replies (2)

Jai Shankar

3 Points Joined March 2023

Just to add I have also read about DTA (Double Tax Agreement), whereby if the income is already taxed by one country there is no need for filing or paying tax with the other country - right? So, if my UK employer has deducted the tax at source from wages, I could potentially just stay as long as I want without having to file or pay taxes in India?

I also don't have Indian bank account or any other sources of Income in India! so it sounds as though there is no dealings with the Indian authority - but please correct me if I am wrong.

CA Sorav Gupta

Chartered Accountant

1005 Points Joined August 2022

Let's assume that you will stay in India for less than 180 days & you will be coming to India for the first time, then for the first 2 years, you can be a non-resident. but from the third year, you will be considered a resident since you will be covered under the condition of 60 days. Kindly note that it applies to both OCI & Non-OCI holders.

Secondly, it is immaterial whether you will be a resident or a non-resident, the income will be taxed in India as the income is accruing or arising in India.

So, the income will be taxable in India as per The Income Tax Act, 1961 regardless of your residential status & the amount will be received in your bank account in India or not.

Now, we can refer to the DTAA to avoid double taxation.

Moreover, if you will plan your stay in India more precisely then you will not be liable to pay any tax in India.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)