TAXABILITY OF SALARY

This query is : Resolved

RAM (Querist)
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13 June 2011 MY COMPANY IS REGISTERED IN INDIA AND HAVING A BRANCH OFFICE IN CHINA. WE HAVE AN INDIAN EMPLOYEE WHICH IS LOOKING FOR BUSINESS/ORDERS IN CHINA. SALARY IS PAYABLE IN HIS INDIAN BANK ACCOUNT.THE PERSON VISITS RARELY IN INDIA.WHETHER HIS SALARY IS TAXABLE OR WHAT IS OTHER REMEDY .

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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13 June 2011 IN MOTHER DAIRY FRUIT (P) LTD CASE IT WAS HELD THAT Reading of provision of Explanation to section 9(1)(ii) makes it clear that the salary payment can be said to be earned in India only if the corresponding services were rendered in India. In other words, if the services are rendered outside India, for which salary has been paid, then the income cannot be said to accrue or arise in India. Further, since in the instant case services were rendered outside India in respect of which the employees received salary outside India, it cannot be said that the same accrue or arise in India; no disallowance, therefore, would be made under section 40(a)(iii).
SO SALARY IS NOT TAXABLE IN INDIA
IT MAY BE NOTED THAT THE EMPLOYEE CONCERNED SHALL NOT BE PRESENT IN INDIA FOR 182 DAYS OR MORE
CA MANOJ GUPTA
JODHPUR
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