Indian income tax on foreign salary

Indian income tax on foreign salary

Hi,
I work for software company. I was in Singapore from July'2012 to 10th Oct'2014 on an internal transfer (long term) from my company. During this period i was NOT getting any salary from my Indian entity, and all my salaries were of Singapore entity, however i was the employee of Indian entity on paper. When i filed my indian taxes for 2014-15 (in July'2015), i was determined to be RESIDENTIAL status and had to pay indian taxes for my Singapore salary between 1 April'2014 and 10th Oct'2014 and obviously i paid taxes for my Indian salary between 11th Oct'2014 to 31st March'2015.

My question is - Did i really have RESIDENTIAL status in 2014-15 because i was outside India for more than 182 days in this year.
I read this income tax law and not really sure if clause (c) of Section-6 (mentioned below) should apply to me - 
I have also mentioned below 31[Explanation. 1]. Do i fall in that category and should be NON-RESIDENTIAL?

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Section 6 - 
(1)  An individual is said to be resident in India in any previous year, if he—
(a)  is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or
(b)  [* * *]
(c)  having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

31[Explanation. 1]—In the case of an individual,—
 (a)  being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ;

Please help. Thanks, Manoj

Asked 8 years ago in Income Tax

You will not be a resident .

Sub clause C says that only instead of 60 days 182 days are substituted.

Shyam Sunder Modani

CA, Hyderabad

1409 Answers

164 Consultations

Talk to Shyam Sunder Modani

Thanks Shyam.
Actually, a multination tax consulting firm filed my taxes for 2014-15 (submitted in July 2015) and they declared me RESIDENT and i had to few heavy taxes and their logic was this -

Since 2014 was my returning year to India, 31[Explanation. 1] does NOT apply, it means that its subclause C can not be applied to replace 60 by 182. And since I was in India for >60 days in 2014, i will be RESIDENT.
Is this correct?

I am totally puzzled with this question and getting mix response from various tax consultants. Some says, i was resident and some say non-resident. I really need to get this right so that i can file 'revision' if i was non-resident and do not fall under any tax violations.

You can also refer to [http://www.incometaxindia.gov.in/Lists/FAQs/DispForm.aspx?ID=41] which says that {{{Condition given in (2) above will not apply to an Indian citizen leaving India for the purpose of employmen}}}. This says "leaving India". Does this mean that in Yr 2014 clause (2) will apply.

Thanks much in advance. Manoj

Asked 8 years ago

Dear Sir,

For FY 2014-15, you status will be resident. As clause 'c' is in relation to the year in which you leave India for employment.

In you case you could have used clause 'c' in FY 2012-13.

Please feel free to get in touch with me for any doubts on the above.

Thanks and Regards,

CA Abhishek Dugar

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

In Section 6 (1) there are two condition . If you satisfy any one of the condition , then you become the resident of india .

1st condition - 182 days in the concerned FY . In the concerned Financial Year 2014-2015 , you were in Singapore up to 10th October. This means you were out of India for 193 days in Singapore . So it is not satisfied .

2 nd condition - In the FY 2014-2015 you were in India for 60 day or more and 365 days in the last four financial year preceding the FY . It means FY 2010-2011, 2011-2012 , 2012-2013 & 2013-2014 . From the fact given above July 2012 , so your stay in India was more than 365 days in that block . Thus you satisfy both the condition of 60 days and 365 days in the 2nd condition .

Further the benefit of the clause b , for the NRI visiting India and the above limit of 60 days has been extended to 182 days . However this condition does not apply to you also .

Hence you becomes the resident of India .

In case of any doubt , you can contact me .

My name is Prakash Sinha and you can contact me on 09818295840 . prakash@psc.co.in