Query on Taxability of Income based on Residential Status

This query is : Resolved

Ramesh (Querist)
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15 April 2011 Hi Friends,
Needs your suggestion and advise on how save Tax in the following scenario : -
1. I will leave India on 3rd Oct 2011 for US for long term exployment on H1 visa
2. I've never gone ouside india before.
Is there any way to avoid becoming orinary resident ( to save tax payable in India on foreign income) as my stay during PY 2011-2012 wud be 185 days which is more than 182 days as per IT Act.
Pls dont suggest abt DTAs , I do not want to go into those complications.
Thanks in advance for your reply.

Regards
Ramesh

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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15 April 2011 Dear Mr. Ramesh,

Here you have to depart little early to avoid the 182 days threshold.Also the taxes paid on income earned abroad can be adjusted against indian income tax liability (if you are in India for 185 days).

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Ramesh

Ramesh (Querist)
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15 April 2011 Hi Anuj,

Thanks for your reply.
As per US visa rules I cannot land in US before 1st Oct (which is cycle for H1b work permit) , Even then from 1 april-30 sep its 183 days.
It is possible to depart say in last week of sept (say 27 sept)from India, spend 2-3 day in dubai & then depart to US ,will it be OK from IT Act point of view?

Or could the other option be that I travel for a week to some nearby country on vacation during april-sept period..will that also be considered to exclude the period of stay in India?

Regards
Ramesh

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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16 April 2011 The ITO shall never agree for the same but legally if you are able to prove that your stay in Dubai was in connection of employment in USA then you are safe.

There is one another condition of 60 days during the current year along with 365 days in previous 4 years, but the period of 60 days is extended to 182 days in case of persons leaving India for the purposes of employment.

So you need to prove that any stay outside India was in connection of employment in USA,to escape the limit of 60 days

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)
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23 April 2011 Hi,

Perfectly Agreed with Mr. Anuj.

Im afraid, you dont have much options i believe Mr.Ramesh.

And yes remember DTAA is not as complicated as you view it. It is Manageble. Its your Income at stake, so you need to plan it out better.

Thank you,

CA. Lohith.J

B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons;