NRI Taxation.
This query is : Resolved
06 June 2017
My brother,is employed by a ship Co.providing service in ship.The H.O.of the Company is of Hong kong.but,he has appointed in the delhi branch of the Company and also getting salary as per contract of service in USD currency, deposit in a bank A/C directly.I hv bring his salary certificate from the Kolkata branch office of the Co.,where his Contractual salary package is written in USD currency.No form -16 generated.No TDs is being deducted as per 26AS.Although is salary as written in the salary certificate is apx USD 5400. He provide service in foreign ship,and used to stay less than 182 days in india.
now,my query is,what address should i mention in ITR as employer? is that Kolkata office,or the Hong Kong office? and whether salary is not taxable in india? please advice .Thanks in advance.
06 June 2017
We need to understand place where services were rendered
If they are rendered in India or outside or both
for those days when services were rendered in india they will be fully taxable
irrespective of days he spent in India.
Balance income treatment depends on his residential status
If they are rendered in India or outside or both
for those days when services were rendered in india they will be fully taxable
irrespective of days he spent in India.
Balance income treatment depends on his residential status
07 June 2017
Mention Hong Kong office. As he stayes less than 182 days in India he is non resident and his salary income earned from the shipping company is exempted in India. No need to file any ITR on this income in India.
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07 June 2017
agreed with Seetharaman sir
07 June 2017
sir,in that case ,if income from house property cross 2.5 lakhs p.a.,then he(NRI) has to file ITR.thne as employer which address shall i mention? the office of the H.O(i.e Hong Kong) or,the Kolkata branch office of the Co., where all reporting done? please guide Sir..thank you,in advance.
04 August 2024
Given your brother's situation as an NRI employed by a Hong Kong-based company but stationed in Delhi, here's how to approach his income tax return filing in India:
### **1. Address of the Employer in ITR**
- **Employer's Address:** For filing the Income Tax Return (ITR) in India, you should mention the address of the office where your brother's salary is processed and where his employment is reported, which is the Kolkata branch office. This is because the Indian tax authorities will consider the office where the employment records are maintained and where the salary is paid in INR for the purpose of filing the return.
### **2. Taxability of Salary Income**
- **Income Taxability:**
- **Income in India:** As your brother is employed by a foreign company but stationed in Delhi and works on a foreign ship, his income is subject to Indian tax laws if he stays in India for more than 182 days in a financial year or has been in India for at least 60 days in the financial year and 365 days in the preceding 4 years. Since he stays less than 182 days in India, his income might not be taxable in India. However, if he meets the residency criteria, his global income would be subject to tax in India.
- **Tax Residency:** Since he stays less than 182 days in India, he is generally not considered a resident under Indian tax laws. As a non-resident, his Indian-sourced income (if any) would be taxable in India.
### **3. Reporting of Salary in ITR**
- **Form and Details:**
- **Form:** As a non-resident with income from foreign employment, he should use **ITR-2**.
- **Salary Details:** Report the salary as per the certificate provided, in INR equivalent.
- **No TDS and Form 16:** Since no TDS is deducted and no Form 16 is issued, he will need to declare the income based on the salary certificate and explain this in the ITR.
### **4. Income from House Property**
- **Taxability:**
- If he has income from house property in India, it needs to be declared in the ITR regardless of his residential status.
- **Tax Return Filing:** Even if the income from house property exceeds ₹2.5 lakhs per annum, he will need to file an ITR.
### **5. Additional Considerations**
- **Double Taxation Avoidance Agreement (DTAA):** If his income is taxed in Hong Kong, he may be able to claim relief under the DTAA between India and Hong Kong to avoid double taxation.
- **Proof of Tax Payment:** Ensure he maintains proof of income and any tax payments made in Hong Kong to substantiate his claims if necessary.
### **Summary:**
- **Employer Address in ITR:** Kolkata branch office.
- **Salary Taxability:** Likely not taxable in India if he qualifies as a non-resident, but declare it as per ITR requirements.
- **House Property Income:** Must be declared if he has any income from house property in India.
- **ITR Form:** Use **ITR-2** for filing.
### **Consult a Professional:**
Given the complexities involving international employment and tax residency status, it is advisable to consult a tax professional who can provide personalized advice and ensure compliance with both Indian and international tax laws.
Feel free to ask if you have any more questions or need further clarification!
### **1. Address of the Employer in ITR**
- **Employer's Address:** For filing the Income Tax Return (ITR) in India, you should mention the address of the office where your brother's salary is processed and where his employment is reported, which is the Kolkata branch office. This is because the Indian tax authorities will consider the office where the employment records are maintained and where the salary is paid in INR for the purpose of filing the return.
### **2. Taxability of Salary Income**
- **Income Taxability:**
- **Income in India:** As your brother is employed by a foreign company but stationed in Delhi and works on a foreign ship, his income is subject to Indian tax laws if he stays in India for more than 182 days in a financial year or has been in India for at least 60 days in the financial year and 365 days in the preceding 4 years. Since he stays less than 182 days in India, his income might not be taxable in India. However, if he meets the residency criteria, his global income would be subject to tax in India.
- **Tax Residency:** Since he stays less than 182 days in India, he is generally not considered a resident under Indian tax laws. As a non-resident, his Indian-sourced income (if any) would be taxable in India.
### **3. Reporting of Salary in ITR**
- **Form and Details:**
- **Form:** As a non-resident with income from foreign employment, he should use **ITR-2**.
- **Salary Details:** Report the salary as per the certificate provided, in INR equivalent.
- **No TDS and Form 16:** Since no TDS is deducted and no Form 16 is issued, he will need to declare the income based on the salary certificate and explain this in the ITR.
### **4. Income from House Property**
- **Taxability:**
- If he has income from house property in India, it needs to be declared in the ITR regardless of his residential status.
- **Tax Return Filing:** Even if the income from house property exceeds ₹2.5 lakhs per annum, he will need to file an ITR.
### **5. Additional Considerations**
- **Double Taxation Avoidance Agreement (DTAA):** If his income is taxed in Hong Kong, he may be able to claim relief under the DTAA between India and Hong Kong to avoid double taxation.
- **Proof of Tax Payment:** Ensure he maintains proof of income and any tax payments made in Hong Kong to substantiate his claims if necessary.
### **Summary:**
- **Employer Address in ITR:** Kolkata branch office.
- **Salary Taxability:** Likely not taxable in India if he qualifies as a non-resident, but declare it as per ITR requirements.
- **House Property Income:** Must be declared if he has any income from house property in India.
- **ITR Form:** Use **ITR-2** for filing.
### **Consult a Professional:**
Given the complexities involving international employment and tax residency status, it is advisable to consult a tax professional who can provide personalized advice and ensure compliance with both Indian and international tax laws.
Feel free to ask if you have any more questions or need further clarification!
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