Taxation on foreign income

Hi,

First we need to check that Under what capacity have you earned that singapore income.

If you had earned that income as a professional then you can claim all the expenses incurred to earn that income including travel expense , telephone exp, etc.

if you have earned this under as salaried employee. then you can claim deductions as HRA , other allowances under sec 10 as provided by the company.

As you are resident of India , all the global income will be included to calculate your income in India.

If you had paid any taxes in SIngapore, you can claim tax rebate under Double Taxation Avoidance Agreement.

No , you cant avoid paying taxes by gifting your money to your relatives.

Hello Sir,

It appears that you were posted in Singapore for an assignment by your Indian Company and the salary for the entire financial year was also paid by your Indian Company.

In such a case, if you were a salaried employee then the entire amount will be taxable in India. The Maximum you can do is avail HRA Benefit for your salary of India & Singapore by submitting your rent receipts. Telephone allowance if provided by your company shall be allowed on actual amount spent, if no such allowance received then you may not be able to avail any deduction.

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

This query is addressed to another expert.

No you cannot submit HRA bills as you were not residing in India during your employment. The company cannot help you in this regard.

Dear Sir

Yes, you should insist your company to allow your HRA claim. In my opinion HRA can be claimed even if you are paying rent outside India. However, some experts are of the view that you can't claim HRA for rent paid outside India.

Please feel free to call/ revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

hi,

If your company's policy does not allow then you cant claim those deductions. though you can insist them to give you HRA claim during that period.

But if any taxes has been paid to Singapore government that you claim as tax credit under DTAA provision (Double Taxation Avoidance Agreement.

for taking benefit of DTAA you need to obtain a TRC or a tax residency certificate, that helps identify and certify your tax residency status to make sure the correct DTAA has been applied. This is also required by the tax laws in India.

While taking TDS credit make sure you are referring to the correct DTAA. Under DTAA, there are two methods to claim tax relief – exemption method and tax credit method. By exemption method, income is taxed in one country and exempted in another. In tax credit method, where the income is taxed in both countries, tax relief can be claimed in the country of residence.

As for the purpose of availing DTAA rebate,

kindly go through this article

http://www.incometaxindia.gov.in/Pages/international-taxation/dtaa.aspx (read article no 15 & 24)