Classic case - Anyone who can come up with a genuine solution
I have a specific case,
An Indian Passport holder, who has been working in a foreign country for a foreign company, would like to come to the foreign company's India office for a period of 12months to 18 months to learn a skill while performing the job.
The payroll of the employee is with the foreign company in the foreign country. India had a double taxation treaty with this foreign country.
The employee, who is an Indian passport holder, has been living in the foreign country for past 4 years only.
Employee is only willing to come to India for this special 1.5 yrs training & assignment if he is given his base location (foreign country salary).And he would only like to pay the tax in one of the countries i.e. either in India or in foreign country
What could be the best way for the company to send this Indian Passport holder on this special 1.5yrs assignment to India, and keep paying him salary from its foreign office ?
Asked 2 years ago in Income Tax from Kolkata, West Bengal
If a person resides in India for more than 182 days in India, he will be treated as resident in India and his entire global salary will be taxable in India.
Further, even if he is non resident in India, salary accrues in India will be taxable in India, irrespective of its residential status.
Salary may also be taxable in foreign country subject to the taxation rules of that country.
However, if there is DTAA between both the countries, double taxation cam be avoided as per the method mentioned in DTAA.
Thanks and Regards
CA Abhishek Dugar
On the basis of the information provided by you, it appears that the person will be in India for a continuous period of 1.5 Years which makes him/ her a resident.
If you are a resident in India then your Global Income is taxed in India.
The only option is to use the DTAA in order to save up on taxes.
Trust this clarifies your query.
Feel free to call back/ get back in case of further clarifications.
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
If the income is accrued in India then it will be taxable in India and the Assessee can claim relief in the foreign country.
Better to pay the salary from foreign office as per our view.