Foreign income

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Ashish Kelkar (Querist)
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19 January 2014 Hi,

From 1st April to 28th July 2013 I was earning Indian Income and from 29th July'13 I went to UK and coming back on 7th Feb 2014 and joining India branch company from 8th Feb 2014. My query is do I need to club my foreign income while filing Income tax in India.

I went to UK on temporary transfer and earning salary in UK as UK employee.

Thanks & Regards,
Ashish Kelkar

@VaibhavJ

@VaibhavJ (Expert)
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19 January 2014 Hi

Yes, since your resident status is R&OR

Thanks

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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19 January 2014 How the payment was made and during your transfer you were still Resident of India so the income is taxable in India. The taxes if any paid in UK will be available for rebate.

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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19 January 2014 I differ from 2 replies given.

The status shall be NR and hence income earned outside India shall not be taxable nor is required to be shown in return of income in India.

Anuj
femaquery@gmail.com

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Ashish Kelkar

Ashish Kelkar (Querist)
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19 January 2014 Thanks fr your replies....few said I need 2 pay and anuj saying I don't need 2 pay....when I checked with E&y they are saying I need 2 pay since I am returning in the same financial year....evethough I fall under exceptional rule of going 2 abroad on employment wherein 182 days rule apply which replaces 60 days

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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19 January 2014 Ashish,

I am in sync with you.

What EY is saying is a non- controversial reply and what I mentioned is what is mentioned in law. Just see that if the foreign credit doesn't need to make you any further taxes then you should take that approach.

Anuj

Ashish Kelkar

Ashish Kelkar (Querist)
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19 January 2014 Hi anuj....Thanks fr ur quick reply...since I have nt read the income tax in depth...does it mentioned anywhere in law that if I return in the same year then I need 2 pay tax? Even though I was more than 182 days in Uk in this fy..if dont club my income then according 2 me I need 2 pay small amount..but if I club income then it is crossing in lakhs with no savings in my pocket

sudarshan

sudarshan (Expert)
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22 January 2014 i am just sharing my views;
since it is temporary trf, if you were on indian cos pay roll , you may be liable for foreign income even though you are NR, since it accrues in india.
Another view is even though you went on deputation and eligible for 182 days exemption, you were not on a visit to india so as to enjoy 182 days exemption. so you may be taxable for indian and foreign income. Any other views?

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@VaibhavJ

@VaibhavJ (Expert)
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22 January 2014 Its clear that he is not going abroad with a view to permanent employment so he does not get benefit of 60 days instead of 182 days.

Dear Ashish,

EY would give advice which would be favorable to his client i.e. your employer.

You can ask for gross up of TDS in your Income so that you would not be burdened by excess TDS

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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22 January 2014 It is nowhere mentioned that a person should leave India for permanent employment. There is a ruling of ITAT which has even allowed self employment i.e. business for the said purpose.

@VaibhavJ

@VaibhavJ (Expert)
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22 January 2014 Thanks for information, however even though by giving benefit of 60 days in this case you have to also fulfill 2nd condition; i.e. he is not in India for 365 days or more during the 4 years prior to the previous year.

I guess that would not be matching & same is sufficient to make him R&OR.

Thanks!

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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22 January 2014 The condition of 365 days in last 4 years comes into picture only when a person leaving India for employment is present in India for a period exceeding 182 days.

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Ashish Kelkar

Ashish Kelkar (Querist)
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23 January 2014 Hi,
Thanks a lot for your answers. To answer Surdhan replay, I am moved to UK on headcount transfer. I got my new employee ID as well as Bank account in UK and I use to get my salary and pay tax as well in UK.

I hope I need not pay tax in India since income did not accrued in India at all.

Thanks & Regards,
Ashish Kelkar

sudarshan

sudarshan (Expert)
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23 January 2014 the question is whether you are NR or R during the previous year. The Act allows concession to those who go out of india for employment purposes. When the come back the concession is available only when it is on a visit and not permanent return to india.