NRI freelance work for an Indian company

As an NRI freelancing for an Indian company, the 10% TDS deducted on your income is required under Indian tax laws. You need to file a tax return in India to declare this income and determine if any additional tax is owed or if you are eligible for a refund.

Even though you're residing outside India, the income earned from freelancing for an Indian company is taxable in India. However, you can avoid double taxation by claiming credit for the taxes paid in India under the India-Germany Double Taxation Avoidance Agreement (DTAA).

For detailed, personalized advice, consider a phone consultancy.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

- It is an Indian Income therefore taxable in India

- Indian Co. should deduct TDS u/s 195. Might be they are showing payment under the head "fee for technical services". The withholding tax rate for such services under India Income tax is 20% whereas under DTAA it is 10%. To get the benefit of lower TDS deduction @10% you need to provide tax residency certificate to an Indian Co. In such a scenario you are liable to pay only 10% tax in India. Also what is the exact nature of services by you?

- You can share copy of invoice, Form 15CB, Form 15CA at aroravivek1982@gmail

-  File ITR in India

-  For detailed discussion you may opt for phone consultation

Ideally in your case TDS Deduction will not be 10% (Section 194J) - but it will be 20% under Section 195 under India Germany DTAA.

Also this tax deducted once you offer income for tax in Germany under global taxation you will able to claim it back under foreign tax receipts

Additionally if you have some recurring expenses from NRO Account you can also file return in India and offer actual profit for taxation and if any amount is refundable out of TDS Done you can claim it back

Hello Ashish! When working as an NRI freelancer for an Indian company, there are specific tax implications and filing requirements in India you should be aware of:

1. TDS Deduction

The 10% TDS (Tax Deducted at Source) deducted by the Indian company is in accordance with the provisions applicable to payments made to Non-Resident Indians under the Income Tax Act, 1961. This rate is standard for consulting or professional services offered by NRIs.

2. Tax Liability in India

As an NRI, your tax liability in India is only on the income that is earned or accrued in India. Since you are providing services from Germany, the income is considered to arise in India because the Indian company is availing your services. Therefore, the income is subject to Indian tax laws.

3. Income Tax Return Filing in India

You will need to file an income tax return in India if your total taxable income in India during the financial year exceeds the basic exemption limit of ₹2,50,000. Given that TDS has been deducted, it's advisable to file a return to claim any potential refund if the TDS exceeds your actual tax liability, especially if your total income (including this income) does not exceed the tax slabs.

4. Tax Slabs for NRIs

For NRIs, the income tax slabs for the financial year 2021-22 (assuming it for calculation purposes) are as follows:

• Up to ₹2,50,000: No tax
• ₹2,50,001 to ₹5,00,000: 5%
• ₹5,00,001 to ₹10,00,000: 20%
• Above ₹10,00,000: 30%

Note that there is no basic exemption limit if the total income exceeds ₹2,50,000.

5. Double Taxation Avoidance Agreement (DTAA)

Germany and India have a DTAA, which means you can avoid being taxed twice on the same income. You can claim relief in Germany for the taxes paid in India by utilizing the Foreign Tax Credit mechanism under German tax laws. You will need to provide proof of taxes paid in India when filing your tax return in Germany.

6. Filing Process

To file your income tax return in India:

• Use Form ITR-2, which is applicable for NRIs.
• Report your Indian income and the taxes withheld.
• You can file your return online via the Income Tax Department’s e-filing portal.

7. No Additional Taxes

If the TDS deducted by the Indian company aligns with the tax slabs applicable to your total income levels, there should be no additional taxes due. However, if your total income including other global incomes crosses a higher tax bracket, the additional tax may be applicable on the slab rates mentioned above.

8. Professional Advice

Given the complexities associated with cross-border taxation and the implications of DTAA, it would be wise to consult with a tax professional who can provide tailored advice based on your specific circumstances and help ensure compliance with tax regulations in both India and Germany.

By addressing these points, you can effectively manage your tax obligations in India while working remotely from Germany.