Expats Not to be Taxed for Work Unrelated to India
Mar. 9 – The Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled on Monday that an expatriate responsible for operations of a company in India as well as other countries in the region need not pay taxes on his salary earned outside India if he can prove the work conducted out of India had nothing to do with his Indian operations. According to the ITAT ruling, if the expatriate fulfils the requirements, he will not be taxed on his salary for the days that he hasn’t been in India.
Tax liability in India is governed by the residential status of the individual during that tax year. Individuals are considered residents if they are in India for more than 182 days or more during the fiscal year or if they are in India for 60 days or more in a year provided that they have also been in India for an aggregate of 365 days or more in the preceding four tax years.
While resident tax payers have to pay taxes on their worldwide income, non-resident Indians are taxes are taxed only on Indian-source income and on income received, accruing or arising in India through a business connection, though or from an asset or source of income in India or though the transfer of a capital asset situated in India.