Tax liabilty for a Indian person stay abroad earning salary in foreign country and paying tax as per
This query is : Resolved
16 December 2024
An individual would be resident in India if he stays for 182 days or more in India during the previous year or if he stays for 60 days during the previous year and 365 days in the 4 years preceding previous year. If an individual fails to satisfy the above conditions, he will be considered as a non-resident in India
In the above context, what would be tax liability in the following case-
- a Indian person working outside India
- having foreign income of Rs 1 crore or above
- pays income tax in that foreign country and
- income in India is less than Rs 5 lakh
- and visits India for about 80 days during PY 2024-25 and more than 365 days in the last four PYs.
What would be the tax liability?
In the above context, what would be tax liability in the following case-
- a Indian person working outside India
- having foreign income of Rs 1 crore or above
- pays income tax in that foreign country and
- income in India is less than Rs 5 lakh
- and visits India for about 80 days during PY 2024-25 and more than 365 days in the last four PYs.
What would be the tax liability?
16 December 2024
An individual will be treated as a Resident in India in any previous year if he / she satisfies any of the following conditions:
1. If he / she is in India for a period of 182 days, or more during the previous year or
2. If he / she is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.
An individual who does not satisfy both the conditions as mentioned above will be treated as Non-Resident in that previous year.
However, in respect of an Indian citizen and a person of Indian origin who visits India during the year, the period of 60 days as mentioned in (2) above shall be substituted with 182 days. The similar concession is provided to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India.
The Finance Act, 2020, w.e.f. Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose Total Income, other than Income from Foreign Sources, exceeds ₹ 15 lakh during the previous year.
As per the second proviso, he stays less than 120 days in PY, so he is not resident or he is NRI.
Hence only income earned in India will be taxable under IT act, 1961
1. If he / she is in India for a period of 182 days, or more during the previous year or
2. If he / she is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year.
An individual who does not satisfy both the conditions as mentioned above will be treated as Non-Resident in that previous year.
However, in respect of an Indian citizen and a person of Indian origin who visits India during the year, the period of 60 days as mentioned in (2) above shall be substituted with 182 days. The similar concession is provided to the Indian citizen who leaves India in any previous year as a crew member or for the purpose of employment outside India.
The Finance Act, 2020, w.e.f. Assessment Year 2021-22 has amended the above exception to provide that the period of 60 days as mentioned in (2) above shall be substituted with 120 days, if an Indian citizen or a person of Indian origin whose Total Income, other than Income from Foreign Sources, exceeds ₹ 15 lakh during the previous year.
As per the second proviso, he stays less than 120 days in PY, so he is not resident or he is NRI.
Hence only income earned in India will be taxable under IT act, 1961
17 December 2024
Further to above, with only the following change---
If an Indian working abroad in a country where there is no tax on salaried income.
In that case, if there will be any change in the tax liability position in India.
If an Indian working abroad in a country where there is no tax on salaried income.
In that case, if there will be any change in the tax liability position in India.
17 December 2024
Yes, in that case sec 6(1A) will be applicable...
"(1A) Notwithstanding anything contained in clause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature."
"(1A) Notwithstanding anything contained in clause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature."
17 December 2024
Mere clarification--
I was talking about an Indian citizen if he is a salaried employee in a country like Saudi Arabia where there is no income on personal tax.
I was talking about an Indian citizen if he is a salaried employee in a country like Saudi Arabia where there is no income on personal tax.
17 December 2024
Yes, that is what has been replies above....
an individual, being a citizen of India, ...
having total income, (other than the income from foreign sources,) .....
exceeding fifteen lakh rupees during the previous year .....
shall be deemed to be resident in India in that year......
if he is not liable to tax in any other country ........
an individual, being a citizen of India, ...
having total income, (other than the income from foreign sources,) .....
exceeding fifteen lakh rupees during the previous year .....
shall be deemed to be resident in India in that year......
if he is not liable to tax in any other country ........
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