Returned from job abroad

Hi, 

I am a working professional and have returned to India after working for >2 years abroad. I resigned from the organization abroad and have joined here as an India based employee. I came back in end June and have my foreign salary paid till June. 

I want to understand if my April-June foreign salary would be taxed in India?

I have heard two contrasting views on this :

1. Most general view -- As I am a resident of India for financial year under consideration, my global income would be taxed per the indian laws.

2. Another view -- As I have rendered my services out of India and have resigned from there and joined here afresh, I would not be taxed for my April-June salary. I would though be taxed for the Indian salary I would get for Jul onwards period.

I would really appreciate and thankful for giving me the right answer to this issue please.  

Thanks,
Asked 3 months ago in Income Tax from Pune, Maharashtra
Residential status of an individual for income tax purpose is determined on the basis of number of days he stayed in India .Income tax Act doesn’t prescribe continuous staying in India.

For income tax purpose residential status of an assessee is classified into;

 I.  Resident (ordinarily)

 II   Resident (not ordinarily)

 III.  Non resident

I.Resident (ordinarily)

An individual besides satisfying any of the basic conditions, satisfies both additional conditions he is considered as ordinarily resident.

II.Resident (not ordinarily)

An individual satisfying any of the basic condition without satisfying additional conditions are considered as not ordinarily resident.

III.Non resident

Individual not satisfying basic conditions are treated as nonresident.

 Basic conditions :
    He is in India for at least 182 days in the previous year, OR
    He is India for at least 365 days preceding the relevant previous year and is in India at least 60 days during the previous year

Additional conditions :
    He was in India for at least 730 days during the seven years preceding the relevant previous year, and
    He was a resident for two out of ten previous years preceding the relevant previous year.

Please check, whether you satisfied these two additional conditions:

if you are Resident (ordinarily), then your global income  will be taxed and is required to report  global assets in your Indian income tax return.

if you are Resident (not ordinarily) then you will be  taxed on your India-source income (i.e., income earned in India or received in India) only and NOT on income earned or received outside India. you will also be taxed for the income accrue or arise outside India and received outside India from a business controlled from India.

Benefits under the Double Taxation Avoidance Agreement may also be explored.
Vishakha Agarwal
CA, Bangalore
213 Answers
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Dear Sir,

It depends on the DTAA between India and that country. In which country you were working.
Abhishek Dugar
CA, Mumbai
766 Answers
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Hope the same is answered as I was out of country for work. If you need further answers pl mail on modani005@gmail.com
Shyam Sunder Modani
CA, Hyderabad
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Hello Sir,

As per the information provided by you, it appears that you were present in India for more than 180 days and hence a resident in India and therefore your global income shall be taxed in India.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
Rohit R Sharma
CA, Mumbai
719 Answers
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