An expatriate means a person based in a foreign country working in India (inbound) or a person based in India (likely Indian citizen) working abroad (outbound).
Under Indian Income Tax Act, 1961 (‘ITA’), incidence of tax depends on the residential status of the taxpayer, and the place and time of accrual or receipt of any income.
The income arising on account of employee- employer relationship is taxable as “Salary” and it includes salary, allowances, perquisites, provident fund contributions, income received from previous employers, retirement benefits, salary arrears, profits in lieu of salary, income on termination of employment etc.
Income from salary will be considered as accrued in India if it is earned through services provided within India. This includes the period of rest and leave that is preceded and succeeded by services rendered in India and forms part of contract of employment. If the Recipient is entitled to the benefit of the DTAA with any country, then the provisions of the DTAA will have to be seen for determining the scope of taxation of salary.
An expatriate is an individual living in a country other than his own country on a temporary basis for employment purposes or for any work reasons. For example, some MNCs send their employees from own country’s company to subsidiary company located in a different country on a temporary basis for employment purpose.
Yes, income earned by an expatriate in India is taxable in India irrespective of the residential status you possess. The payment made to expatriates is also subject to TDS. Our professional team at Especia has vast experience in handling expats taxation matters. We advise you that your income is taxable in India.
Your overseas income is tax-free in India if your status is non-resident in India. If you are a resident in India, then your global income is taxable. We provide you the best consultancy to keep your residential status non-resident in India to save your tax on overseas income.
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