An employee working in India(resident of India) for & on behalf of Foreign Co..He receives salary from that Foreign co. itself but that salary is credited in Indian Bank a/c(NRE a/c) ,no other Income is being received by that employee in India.He's working on behalf of that foreign co. since 2007,but that Foreign co. is not deducting any Tax since 2007 itself.Now Pl tell where he will be liable to Tax(in India or Outside),actually he's having PAN no.which is being issued by Central Govt. of India.Whether we have to file his I.T Return in India or not? Pl reply as early as possible.
4 Replies
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 13 March 2010
Mr. Naidu,
In your case although company is a foreign company then also it has to deduct TDS on Salary u/s 192B. If company has not deducted TDS and salary amount of employee is taxable then employee has to deposite the Tax with interest u/s 234A, 234B, 234C. For ITR section 139(1) will be applicable to him and he has to file ITR with Income Tax Deptt.
As you are talking since 2007 which means F.Y. ending March31, 2008. Then Section 139(4) Belated Retun will be applicable and he should file his return before March31, 2010 and there can be a penalty also u/s 271F upto Rs. 5,000 depending upon A.O.
For company this salary amount will not be allowed as expense u/s 40(a)
C.Balaji
(Learner)
(1867 Points)
Replied 13 March 2010
Dear Wanishree........
According to me..........
Since he is a Resident of India and income received in India........He is required to file his IT return......
For F.Y. 07-08 - 31.03.2010 is the last date.....So file ur return after payment of tax.....
CA. Pradeep Nayak
(Not In Practice)
(1408 Points)
Replied 13 March 2010
Agree with Sudhanshu. The income earned by a resident is always taxable in India.
Adding my views to what Sudhanshu has stated above, from F.Y 2010-11 the employee can opt to advance tax during Sept. Dec., & March and thus save the interest levied under Sec 234B & Sec. 234C
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 13 March 2010
You are right Mr. Nayak, employee may opt for Advance Tax but what i think no foreign company will forget to deduct TDS on salary amount because of Section 40(a) as on this expense also they have to pay tax. So practically i dont think any company will forget this.
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