Foreign salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2014 one of my client is a non-resident, i have to file his return for a.y 12-13, he has earned foreign salary from dubai rs.309000/-, and indian income 47000/-...and lic rs.10000/-
now my query is how to show foreign salary in (it is exempt) ITR - 2?
can i take deduction of lic ?

Shrikant Toshniwal

Shrikant Toshniwal (Expert)
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26 March 2014 dear sir ,you file itr 2 and claim exempt income of salary from dubai u/s 10 and indian income as per my justification if it is investment income it is declared for other source (or other provide detail) and claim lic .

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2014 you mean to say under allownces exempt u/s 10?

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Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2014 you mean to say under allownces exempt u/s 10?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 For filing the income tax return (ITR) for your client who is a non-resident with foreign salary income from Dubai, here's how you should handle the income and deductions:

1. **Foreign Salary Income:**
- The foreign salary income earned by your client in Dubai, amounting to Rs. 3,09,000, should be reported under the head "Income from Salaries" in the ITR-2 form.
- Since your client is a non-resident and the income is earned outside India, it is considered as foreign income. As per the provisions of the Income Tax Act, foreign income received outside India by a non-resident is generally not taxable in India for non-residents unless it is derived from a business controlled in or a profession set up in India.
- Typically, foreign salary income earned by a non-resident is exempt from tax in India, especially if it is subject to tax in the foreign country (Dubai, in this case) due to the Double Taxation Avoidance Agreement (DTAA) between India and UAE.

2. **Indian Income:**
- The Indian income of Rs. 47,000 (which is presumably from some Indian sources) should also be reported under the respective heads in the ITR-2 form.
- The LIC premium of Rs. 10,000 can be claimed as a deduction under Section 80C of the Income Tax Act, if it meets all the eligibility criteria specified under this section.

3. **Filing the Return:**
- In the ITR-2 form, you will report the foreign salary income under "Income from Salaries." Since this income is exempt from tax in India due to the provisions of DTAA, you should fill out the appropriate sections or schedules that pertain to foreign income.
- For the LIC premium of Rs. 10,000, you can claim it as a deduction under Section 80C while filing the return.

4. **Exemption of Foreign Income:**
- While filling out the ITR-2 form, ensure that you declare the foreign income accurately under the relevant sections. There might be specific schedules or disclosures for foreign income which you should review in the ITR-2 form instructions.
- It's crucial to correctly apply the provisions of DTAA between India and UAE to ensure the correct treatment of foreign income as exempt from tax in India.

5. **Consultation:**
- If you are uncertain about the specific sections or how to correctly report foreign income, it's advisable to consult a tax advisor or a Chartered Accountant who specializes in international tax matters. They can provide tailored guidance based on the specific circumstances of your client.

By following these steps and ensuring compliance with the provisions of the Income Tax Act and DTAA, you can accurately file the income tax return for your non-resident client for A.Y. 2012-13 (F.Y. 2011-12).