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Taxablity of Salary paid to NRI

Shravan (Student) (38 Points)

09 April 2020

Dear All,

* Mr. X is an NRI and employee Oil Drilling Contractor "Drilling Inc" in UAE .

* "Drilling Inc" received a contract from ONGC India to extract oil from the offshore oil rig in Mumbai

* "Drilling Inc" sent their employ Mr. X to Mumbai to provide service to ONGC from the month of January - February. .

* Salary is Paid by "Drilling Inc" to Mr. X in UAE for all 12 Months. Is salary earned by Mr. X who is an NRI taxable in India for the month of Januray- February??

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3 Replies

Moneesh Nair (0) (609 Points)
Replied 09 April 2020

In case of salary, services rendered in India is considered to be income deemed to be accrued in India. Hence the salary income from Jan to Feb will be taxable in India.

1 Like

Mandakulathur Ananthanarayanan (186 Points)
Replied 09 April 2020

Though the salary is taxable, it is possible to take a view that the person may claim refund of taxes deducted at source by the UAE employer by filling ROI in India. (provided the income in India does not exceed INR 2.5 lakhs)

debora M (BUSINESS DEVELOPMENT MANAGER) (1697 Points)
Replied 09 April 2020

An NRI’s income taxes in India will depend upon his residential status for the year. If your status is ‘resident,’ your global income is taxable in India. If your status is ‘NRI,’ your income which is earned or accrued in India is taxable in India. Salary received in India or salary for service provided in India, income from a house property situated in India, capital gains on transfer of asset situated in India, income from fixed deposits or interest on savings bank account are all examples of income earned or accrued in India. These incomes are taxable for an NRI. Income which is earned outside India is not taxable in India. Interest earned on an NRE account and FCNR account is tax-free. Interest on NRO account is taxable for an NRI.