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Regarding taxability - NRE Account - Salary

Tax queries 2522 views 1 replies

Chandramouli

Director

35 Points Posted on 17 July 2010

I have a query regarding the salary credited in the NRE account.

The case situation is as follows:

A non-resident indian employed by a foreign shipping company works in the ship. The salary is credited to the NRI's NRE account through TT by the foreign company.

Whether the salary is taxable in India as the interest derived from the NRE account is specifically exempted as per Section 10 (4). Also whether the salary credited can be taken as received in India.

Kindly clarify the matter.

Replies (1)

Juzer Sadikot

CA - innovative solutions for Imports an

1309 Points Posted on 17 July 2010

Dear Mr. Chandramouli It will sound weired but its true that the TT for salary received directly to NRE Account shall be taxable in India considering as it is received in India Section 5(2)(a). According to me, the said section is illogical but cant do anything. The things might be different if your friend has deposited such Salary first to his foreign Bank Account and then remitted to his NRE Bank Account. No nexus between Exemption of Interest on NRE Account and crediting Salary to NRE Account. Regards Juzer