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Non-Resident Income

29 March 2010

could any one tell me " Is a NOn-Resident Indian has a income under head 'SALARY' or not..........if yes could u give me an example????????!!!!!!

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Amir (Learner) (4016 Points)
Replied 30 March 2010

Dear Sangam,

A NRI can very well have Income under head Salary - taxable under Indian Income Tax Act. -

Example can be linked with Sec 5 and Sec 9

Sec 5 says Income of Non resident shall include

Income which is received or is deemed to be received in India in such year by or on behalf of such person

Eg:-In this case if the salary of NRI is first received in India then it will be taxable nomatter he is employed and working in anyother country

Sec 9 defines Income deemed to accrue or arise in India -

(ii) income which falls under the head “Salaries”, if it is earned in India.

[Explanation.—For the removal of doubts, it is hereby declared that the income of the nature referred to in this clause payable for—

(a) service rendered in India; and

(b) the rest period or leave period which is preceded and succeeded by services rendered in India and forms part of the service contract of employment,

shall be regarded as income earned in India

Eg:-So where NRI has worked for some period in India then salary earned by him during this period will be taxable nomatter he is emplyed by a Foreign Company,

Pls note that the above Income will be taxable but whether actual tax will be paid on them or not will be determinded by DTAAs with the rspectiver countries + Other provisions of the Act like Exemption u/s 10(6)