12 May 2009
I am working with a foreign firm via their Indian counter-part (some arrangement by which while I work for the foreign company daily I get paid by the Indian firm). Now that they have fallen apart, the foreign firm still wants me to continue working for them. The question is: Can I continue to work from home or a hired office without forming any commercial entity and get salary directly from the foreign firm via deposition of the salary in my Indian bank account. How do I deal with TDS/Advance personal tax in such a situation.
13 May 2009
The reply to first query is yes, you can get the salary directly from the foreign company. The answer to your second query is that your foreign employer is liable to deduct TDS from the salary payable to you u/s 192 of the income Tax Act and pay the same to the Govt. For which they would require a TAN in India and a they are also liable to file quarterly returns etc. also and a salary certificate will also be required to be issued to you. For doing that they can get the services of any chartered accountant in India and that chartered accountant can do all the formalities for them for a fee.
Hope this gives you a good insight . In case o any further clarification, you are welcome.
13 May 2009
Thanks a lot to both experts Mr. Anand Dubey and Mr. Rajesh Dua. Can You elaborate on following: 1.Mr. Dua has talked about the company deducting TDS, Having a TAN number and issuing Form 16. Since the foreign company has no presence in India they may not like to go through all this hassle. Is it not possible that I deposit advance tax every quarter or half yearly and get a salary payment certificate from them for my record. 2. since money will be transferred from a foreign country-though I will get it in rupees- someone pointed out that some kind of RBI clearance has to be obtained. Can you kindly clarify on this please? The exact wording used by the person who has opined are: "However, in case you are being paid from abroad, the same needs permission from the RBI and may have different taxation implications like the double-taxation norm, FBT, etc."
10 March 2011
1.The same can work only if you deposit your tax liability on monthly basis as would have been done by the foreign company. 2.No RBI clearance is required.
CAclubindia
