Mr X is working in a Private limited company in India. On 3rd October’07, he was sent abroad on deputation for two years. There is a DTAA agreement with the foreign country.
The tax on Indian salary is borne by M. In addition to his salary in India (which continues to be credited in his salary account in India), he is entitled to DA and hardship allowance abroad. The company agrees to pay tax on the income abroad. In terms of perquisite, he is entitled to house, car with driver, telephone, medical (on actual basis) and upto $ 200 per month for meeting miscellaneous expenses on actual basis.
The questions on the above case study are as follows:
What is his residential status an on 31.3.2008?
Can he open NRE account before he leaves for abroad? What are the requirements for opening NRE Account?
Can he claim Sec80C deduction for AY 2008-09 and AY 2009-10?
Is it necessary to disclose foreign income in the return?
At what rate should the company deduct tax on his Indian salary?
As the company agrees to pay tax on his foreign income, what happens if the company does not pay tax to the foreign Income Tax authority?
Can he claim the TDS on salary deducted abroad in India even if the tax is borne by the company?
What are the documents required in India to claim the tax deducted outside?
Can he maintain salary account and NRE account simultaneously?
Will it become taxable income, if he remits money in his (or any of his relatives) savings account in INR or foreign currency?
What is the limit of remittance in India per transaction and during the whole year in NRE account and/or savings account?
The money lying in NRE account and interest on it is fully tax free. But what will happen, when he finally decides to come back to India?
What are the formalities he has to do on his coming back to India?
The tax on Indian salary is borne by M. In addition to his salary in India (which continues to be credited in his salary account in India), he is entitled to DA and hardship allowance abroad. The company agrees to pay tax on the income abroad. In terms of perquisite, he is entitled to house, car with driver, telephone, medical (on actual basis) and upto $ 200 per month for meeting miscellaneous expenses on actual basis.
The questions on the above case study are as follows:
What is his residential status an on 31.3.2008?
Can he open NRE account before he leaves for abroad? What are the requirements for opening NRE Account?
Can he claim Sec80C deduction for AY 2008-09 and AY 2009-10?
Is it necessary to disclose foreign income in the return?
At what rate should the company deduct tax on his Indian salary?
As the company agrees to pay tax on his foreign income, what happens if the company does not pay tax to the foreign Income Tax authority?
Can he claim the TDS on salary deducted abroad in India even if the tax is borne by the company?
What are the documents required in India to claim the tax deducted outside?
Can he maintain salary account and NRE account simultaneously?
Will it become taxable income, if he remits money in his (or any of his relatives) savings account in INR or foreign currency?
What is the limit of remittance in India per transaction and during the whole year in NRE account and/or savings account?
The money lying in NRE account and interest on it is fully tax free. But what will happen, when he finally decides to come back to India?
What are the formalities he has to do on his coming back to India?
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