Kindly guide us whether the below mentioned person would be charged to tax in India on his salary income. One of my Client has a status of Non-Resident for the AY 2011-12 as per Income Tax Act, 1961 (As he moved out of the country for employment in Dubai and his stay in india for the relevant previous year (2010-11) is less than 182 days). So he is covered under the exception to Section 5. He has received the Salary Income from the Dubai Company in India in his NRI Account. It can be said that the salary income is arise outside india but it is not sure whether that will be treated as deemed to received in India, as the Dubai Company credits the Salary directly in the NRI of the assessee opened by him in India.
Secondly, Is any DTAA is there with Dubai so that the assessee can take caveat under the DTAA provisions. If not so then assessee is liablr to pay tax at what rates in india as the return has not been filed till date by the assessee.
30 October 2011
There are plenty of case laws available which have held that SALARY income accrues or arises at the place where the services are rendered. Also there is a concept of deemed receipt of income , the moment the income is payable.
The person shall be liable to pay tax on income for work done in India but not in Dubai.
There is DTAA between India and UAE, and yes you can take help of that DTAA.
CAclubindia
