Tax liability for salary earned in Singapore

Dear Sir,

Hope you are doing well !!

Yes, your understanding is correct.

Individual taxpayers who are residents of India are allowed to claim credit for foreign taxes paid in overseas countries as per the provisions of the DTA between India and the other country (where such exists).

Hi,

- If you are NRI in F.Y. 2017-18 then there is no need to file ITR for income earned in Singapore. Only income earned in india is taxable.

- In respect to F.Y. 2018-19, if your are resident in Inida then income earned in singapore will be taxable in India and benefit of double taxation would be available.

Thanks

Double taxation relief is provided under income tax Act to avoid double taxation of income. You will avail relief u/s 90 of the Act.

Your income would be covered under article 15 of the DTAA between India and Singapore and since were in Singapore for more than 183 days it will be taxed only in Singapore.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Hi,

For FY 2018-19(AY 2019-20):

As per article 15, your income will be taxed in singapore under source rule and in India under residence rule.

However, as per article 25,  you will get the credit of Singapore taxes paid in India.

For claiming tax credit, you need to file form 67 before filing ITR in India. You would also need proof of payment of such taxes paid abroad, return of income of foreign country and a certificate from the employer regarding such deduction.

Hi,

You can refer the the followings:

Article 15-Remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the firstmentioned State.

Article 25-Avoidance of double taxation-  Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Singapore, India shall allow as a deduction from the tax on the income of that resident an amount equal to the Singapore tax paid, whether directly or by deduction.

Also find below the link for your reference:

http://www.advocatekhoj.com/library/agreements/doubletaxation/56.php

Further,in accordance with Rule 128, in order to claim FTC (foreign tax credit), you are required to file following documents on or before due date of filing of return:

1. A statement of :

• foreign income offered to tax
• foreign tax deducted or paid on such income in Form No. 67

2. Certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the taxpayer :

• From the tax authority of the foreign country
• from the person responsible for the deduction of such tax
• signed by the taxpayer

3. Proof of payment of taxes outside India

Hi,

For AY 2018-19 your full income will be assessable in India as you are an ordinary resident.

However you can claim relief under sec 90 and sec 91 for the tax paid in Singapore.

As per article 15 & 25 of DTAA between India and Singapore,which says income will not be doubly taxed. 

So, you will be given relief by either of the countries.

Hello Sir,

Please refer to below explanation and taxability applicable-

Job Period- Outside India

FY 2017-18 : Period covered April 1, 2017 till March 31, 2018

I understand that you were completely working outside India. This means you qualified as non resident of India for the FY 2017-18 and hence nothing was taxable in that year in India as the income was purely sourced and received outside India.

FY 2018-19 : Period covered April 1, 2018 till July, 2018

In the financial year 2018-19, since you returned in/after July, 2018 back to India, you certainly qualify to be resident. Being a resident, you are taxable on global income. Thus, at the time of filing the tax return, salary earned outside India for the April 2018- July, 2018 shall be taxable in India.

Complexity: This global period salary is getting taxed twice since you say taxes were already deducted by Singapore authorities. In such case , there is article 25  of DTAA between India and Singapore, which extends the benefit of claiming Foreign tax credits (FTC) against the taxes payable in India on that global income. In the nutshell, you will pay the differential tax leviable in India on the global service period.

Method of computation of FTC:

1. Compute Indian Income (A)

2. Compute Foreign period income (B)

3. Club together to compute total taxable income (A+B=C)

4. Compute taxes on (c) at the tax rates applicable in India. This is (D)

5. Take out the total tax paid in Singapore using your return filed there or any other document that you possess. (E)

6. Compute effective tax rate in India {D/C*100 }= (F)

7. Compare E and F and the least of the two shall be your FTC amount.

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This FTC shall be claimed as credit against the total taxable income in India to avoid Double taxation of income in India.

This is just on the basis of the disclosures made by you in the query. Answer may vary if there are any changes in the facts of the case.

Hope this helps !

Thanks

Damini