Ad free CAclubindia and daily updates on your mobile. Subscribe Now!

Tax Implications for Salary from Overseas

02 September 2021

Dear Friends,

One of my cousin is joined in U.S. MNC in India. U.S. MNC is having an office at India, but no any Operations in India. Hence, U.S. company is paying Salary to the Indian employees bank account directly (Wire Transfer) from U.S. Bank.
So, what is the procedures to receiving this Salary Income? What about Income Tax implications for this?

Reply
Follow
Share

3 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 02 September 2021

It should be taxable as it is deemed to accrue in India

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Mohanraj J (1174 Points)
Replied 02 September 2021

Can we avail tax exemptions like PPF, Insurance, Loan Interest etc, Medical Insurance etc,

JGM (Knowledge Sharer) (443 Points)
Replied 02 September 2021

From Indian employee perspective, he can consider going for volunatry PF registration. However, not sure whether US MNC would agree for it. He can check with his employer. On a separate note, there is high likelihood of US MNC having PE in India unless it is a Liaison Office. Further, since your cousin is Indian resident, his global income is taxable in India. Hence, in the instant case, the salary is taxable in India.

For claiming the exempt component of Salary, you need to check with the employer. If the employer provides those components, exemption for such should be available. Please take note of perquisite taxation as well.

1 Like