Expatriate workers' entire salary taxable

Foreign Enterprises

 As per Section 9 of the Act, or arise in India if it is earned in India.

 The salary relating to the period during which service is rendered in India shall be treated as earned in India and, therefore, will be liable to tax in India.

 The implication of this provision is that an expatriate employee, who receives his salary wholly outside India, or partly in his home country and partly in India, is liable to pay tax in India on his entire salary, including the portion of salary received outside India.

 These provisions are, however, subject to any specific provision contained in the tax treaty between India and the foreign country to which the employee belongs.

 The meaning of the term

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Business Standard
177 22
Business Standard

Expatriate workers' entire salary taxable

Foreign Enterprises

H P Agrawal  |  New Delhi 

 As per Section 9 of the Act, or arise in India if it is earned in India.

 The salary relating to the period during which service is rendered in India shall be treated as earned in India and, therefore, will be liable to tax in India.

 The implication of this provision is that an expatriate employee, who receives his salary wholly outside India, or partly in his home country and partly in India, is liable to pay tax in India on his entire salary, including the portion of salary received outside India.

 These provisions are, however, subject to any specific provision contained in the tax treaty between India and the foreign country to which the employee belongs.

 The meaning of the term

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Expatriate workers' entire salary taxable

Foreign Enterprises

Income is taxed in India on the basis of receipt or accrual. The income from salary, however, stands in a peculiar position under the Income Tax Act.  As per Section 9 of the Act, or arise in India if it is earned in India.

 The salary relating to the period during which service is rendered in India shall be treated as earned in India and, therefore, will be liable to tax in India.

 The implication of this provision is that an expatriate employee, who receives his salary wholly outside India, or partly in his home country and partly in India, is liable to pay tax in India on his entire salary, including the portion of salary received outside India.

 These provisions are, however, subject to any specific provision contained in the tax treaty between India and the foreign country to which the employee belongs.

 The meaning of the term
image
Business Standard
177 22
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