income from nepal
This query is : Resolved
16 February 2009
dear collegues,
my client earned salary income in nepal. the company he was working
deduct tds in nepal and remit it to the revenue dept. of nepal.the
income shown is in nepale rupees. the assessee has status of non
resident as per sec. 6. now the question arises
1) how we will proove that the assessee was in nepal for days when
there is no restriction of to and fro from nepal for residential status.
2) how we will show the nepale rupees income in india for filing the
return income in india i.e what will be conversion rate for 31.3.2006
& 31.3.2007.
regards
ca man mohan modi
my client earned salary income in nepal. the company he was working
deduct tds in nepal and remit it to the revenue dept. of nepal.the
income shown is in nepale rupees. the assessee has status of non
resident as per sec. 6. now the question arises
1) how we will proove that the assessee was in nepal for days when
there is no restriction of to and fro from nepal for residential status.
2) how we will show the nepale rupees income in india for filing the
return income in india i.e what will be conversion rate for 31.3.2006
& 31.3.2007.
regards
ca man mohan modi
17 February 2009
1. You can show the attendence record of the Company where he was working in Nepal.
2. For exchange rate, please visit RBI website.
2. For exchange rate, please visit RBI website.
17 February 2009
please explain
30 July 2024
When dealing with income earned abroad, such as salary from Nepal, and filing income tax returns in India, you need to address several important aspects, including proving residency status, conversion of foreign currency, and proper reporting. Here’s a detailed approach to handling these issues:
### **1. Proving Residence Status and Period of Stay in Nepal**
As per the Indian Income Tax Act, a person is considered a non-resident if they do not meet the criteria of staying in India for a specified number of days. Here’s how to prove the period of stay in Nepal:
- **Maintain Travel Records:** Keep records of travel dates, including boarding passes, tickets, and visa stamps. This helps in demonstrating the periods of stay outside India.
- **Employer Documentation:** Obtain a certificate or letter from the employer in Nepal detailing the period of employment and confirmation of the period spent in Nepal.
- **Passport Stamps:** Use passport stamps to prove entry and exit dates. Immigration stamps can be used to show the duration of stay in Nepal.
- **Residential Evidence:** If possible, gather documents such as rental agreements or utility bills from Nepal to establish the period of residence.
### **2. Reporting Foreign Income in India**
When filing income tax returns in India, you need to convert foreign income into Indian Rupees. Here’s how to approach this:
**Conversion Rate:**
- **Income Reporting:** Salary earned in Nepal should be reported in Indian Rupees in the income tax return.
- **Conversion Rates:**
- **For Financial Year (FY) 2006-07:** The income for FY 2006-07 (Assessment Year 2007-08) should be converted using the exchange rate as of 31st March 2007.
- **For Previous FY:** Similarly, for FY 2005-06 (Assessment Year 2006-07), use the exchange rate as of 31st March 2006.
**Obtaining Conversion Rates:**
- **Official Sources:** Use the conversion rates published by the Reserve Bank of India (RBI) or other official sources. The RBI provides historical exchange rates that can be used for converting foreign income into Indian Rupees.
- **Conversion Rate for 31st March 2006 and 31st March 2007:**
- The exact rates can be found in RBI archives or on financial websites that offer historical exchange rates. Typically, you can access these rates on the RBI website under the section for historical exchange rates.
### **How to Convert Foreign Income:**
1. **Obtain the Exchange Rate:** Find the exchange rate for the relevant dates from an official source like the RBI.
- For example, if the exchange rate for 31st March 2006 was 1 NPR = X INR, and for 31st March 2007 was 1 NPR = Y INR, use these rates for conversion.
2. **Convert the Salary Income:**
- If the salary income in Nepalese Rupees (NPR) is `Z NPR` for a particular year, convert it to Indian Rupees (INR) using the applicable exchange rate.
- For FY 2006-07, if the income is `Z NPR`, and the conversion rate on 31st March 2007 is `Y INR/NPR`, the income in INR will be `Z NPR × Y INR/NPR`.
**Example Calculation:**
- **Income in NPR:** Suppose the total salary income is `12,00,000 NPR`.
- **Exchange Rate on 31st March 2007:** Assume the rate is `0.67 INR/NPR`.
- **Converted Income in INR:** `12,00,000 NPR × 0.67 INR/NPR = 8,04,000 INR`.
### **Summary**
1. **Proving Residency and Period of Stay:**
- Maintain travel records, obtain employer documentation, and use passport stamps and residential evidence to prove the period of stay in Nepal.
2. **Reporting Foreign Income:**
- Convert the foreign income (Nepalese Rupees) into Indian Rupees using the exchange rate as of 31st March of the respective financial year.
- Obtain the historical exchange rates from official sources such as the RBI.
For specific calculations and conversion rates, consulting the RBI website or financial institutions with historical data is advisable. Additionally, if you have complex situations or need precise advice, consulting a tax professional or accountant familiar with international tax laws is recommended.
### **1. Proving Residence Status and Period of Stay in Nepal**
As per the Indian Income Tax Act, a person is considered a non-resident if they do not meet the criteria of staying in India for a specified number of days. Here’s how to prove the period of stay in Nepal:
- **Maintain Travel Records:** Keep records of travel dates, including boarding passes, tickets, and visa stamps. This helps in demonstrating the periods of stay outside India.
- **Employer Documentation:** Obtain a certificate or letter from the employer in Nepal detailing the period of employment and confirmation of the period spent in Nepal.
- **Passport Stamps:** Use passport stamps to prove entry and exit dates. Immigration stamps can be used to show the duration of stay in Nepal.
- **Residential Evidence:** If possible, gather documents such as rental agreements or utility bills from Nepal to establish the period of residence.
### **2. Reporting Foreign Income in India**
When filing income tax returns in India, you need to convert foreign income into Indian Rupees. Here’s how to approach this:
**Conversion Rate:**
- **Income Reporting:** Salary earned in Nepal should be reported in Indian Rupees in the income tax return.
- **Conversion Rates:**
- **For Financial Year (FY) 2006-07:** The income for FY 2006-07 (Assessment Year 2007-08) should be converted using the exchange rate as of 31st March 2007.
- **For Previous FY:** Similarly, for FY 2005-06 (Assessment Year 2006-07), use the exchange rate as of 31st March 2006.
**Obtaining Conversion Rates:**
- **Official Sources:** Use the conversion rates published by the Reserve Bank of India (RBI) or other official sources. The RBI provides historical exchange rates that can be used for converting foreign income into Indian Rupees.
- **Conversion Rate for 31st March 2006 and 31st March 2007:**
- The exact rates can be found in RBI archives or on financial websites that offer historical exchange rates. Typically, you can access these rates on the RBI website under the section for historical exchange rates.
### **How to Convert Foreign Income:**
1. **Obtain the Exchange Rate:** Find the exchange rate for the relevant dates from an official source like the RBI.
- For example, if the exchange rate for 31st March 2006 was 1 NPR = X INR, and for 31st March 2007 was 1 NPR = Y INR, use these rates for conversion.
2. **Convert the Salary Income:**
- If the salary income in Nepalese Rupees (NPR) is `Z NPR` for a particular year, convert it to Indian Rupees (INR) using the applicable exchange rate.
- For FY 2006-07, if the income is `Z NPR`, and the conversion rate on 31st March 2007 is `Y INR/NPR`, the income in INR will be `Z NPR × Y INR/NPR`.
**Example Calculation:**
- **Income in NPR:** Suppose the total salary income is `12,00,000 NPR`.
- **Exchange Rate on 31st March 2007:** Assume the rate is `0.67 INR/NPR`.
- **Converted Income in INR:** `12,00,000 NPR × 0.67 INR/NPR = 8,04,000 INR`.
### **Summary**
1. **Proving Residency and Period of Stay:**
- Maintain travel records, obtain employer documentation, and use passport stamps and residential evidence to prove the period of stay in Nepal.
2. **Reporting Foreign Income:**
- Convert the foreign income (Nepalese Rupees) into Indian Rupees using the exchange rate as of 31st March of the respective financial year.
- Obtain the historical exchange rates from official sources such as the RBI.
For specific calculations and conversion rates, consulting the RBI website or financial institutions with historical data is advisable. Additionally, if you have complex situations or need precise advice, consulting a tax professional or accountant familiar with international tax laws is recommended.
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