Tax advice on cash transfer to foreign nationals from my bank a/c
I live in Delhi & work from home for an international company. Recently my boss started sending me additional money transfers to my bank account for paying salary to her other foreign employees staying in Delhi.
The problem is that these money transfers are around 1 lac every month and i've to handover in cash since her employees are not having any bank account. (So i don't have any proof where the money is going)
I cannot say her not to transfer and those foreigners are not willing to open a bank account. What should i do ? Shall i take a declaration from the company that the money transfer is for salary ? or something like that.
I hope i've made myself clear. Please guide me as i don't want to pay Income tax on the money which i am not earning.
Asked 1 year ago in Income Tax from Delhi, Delhi
In this case please keep all the FIRC ( Foreign inward remittance certificate ) with yoursef. Further please ensure that the inward remittance which has been meant for the salary to the foreigner employee in India is separately visible in your bank statement both the credit side and debit side .
As per the tax there are few things which are important -
1. The employer should deduct the tax ( TDS ) on salary income of the foreigner - This is missing ( perhaps )
2. The employee in India is liable to pay tax and file return . please ensure they file the return and show the income of Rs 1lac PM as shown above .
3. Please take an acknowledgement of such receipt of the amount each month .
4. Please ensure that the employee are on employment visa and not any other visa and he has a FRRO registration .
5. What about the PF /PPF complaince as he may become the foreign worker .
From the tax prospective , please ensure that there is proper mentioning in the FIRC , proper acknowledgement and most important the employee are filling the ITR and paying the tax .
Talk to Prakash Sinha
4.9 on 5.0
You should take a declaration from the company that they transfer money to you as an imprest account for payment of salary to other employees.
Talk to Pratik Anand
CA, New Delhi
4.7 on 5.0
You have to obtain written instructions from your employer about the amounts deposited in your account are intended for payment of salaries of employees of your employer. Also obtain vouchers duly signed by recipients confirming the receipt of salary from their employer.
You may be treated as agent of non resident and amount may be taxed in your hands.
If the transaction is not above board, you may be hauled up for money laundering by ED
Talk to Vijay N. Kale
4.9 on 5.0
Hi Aryan in the present case if the payment is to foreign nationals then you need to open Bank Accounts and transfer the same.
If you get the same in your account then you need to clarify from the employer regarding the reimbursement is from salary or else it will be taxed in your hands.
If the amount of salary is below 20000 you can obtain declaration and receipt from the employees.
Talk to Shyam Sunder Modani
4.7 on 5.0