NRI NRE A/c Salary Income Receipt - Not Taxable in the Hand of NRIs Working Abroad

NRE A/c Salary Income Receipt - Not Taxable in the Hand of NRIs Working Abroad

NRE A/c Salary Income Receipt - Not Taxable in the Hand of NRIs Working Abroad

 

Mumbai ITAT decided in a recent judgment that it was not possible to cause a tax incident that the only receipt of salary income by the employee of the NRE Bank accounts in India (which works in a ship on international routes run by Singapore's shipping company).

Under the Indian tax laws, the tax incidence arises on the basis of residential status, which in turn depends on the No of days stayed in India. A resident taxpayer of India is required to be tax on his worldwide income. But, a non-resident is subject to tax in India only under 2 circumstances, i.e.

  1. Income accrued in India and
  2. income received in India. Hence, in the case of a non-resident, income is considered as taxable in India even if it is received in India (via employment done outside India).

In the existing case, The Mumbai Income Tax Appellate Tribunal dismissed the income tax dept argument that the compensation balance attributed to an Indian bank account should be required to be taxed. It was found that the employee had a legal right to collect his or her salary earned at his employment place, (that is situated at a foreign employer outside India).

The Mumbai Income Tax Appellate Tribunal stated that: "The meanings of an earned income and a received number are qualitatively different. In this situation, the salary is collected in India, However, salary income is earning outside India”.

In the above situation, Mumbai Income Tax Appellate Tribunal stated a new highlight of income received in India in this order. It distinguished itself by maintaining that salary pay was not received in India, as the employee had the legal right to earn salary wages outside of India. The salary amount was available to employees outside India and he merely exercised his own right to transfer the salary to India.

In conclusion, the contracts of employment should be structured properly. This case contracts of employment may point that the salary for services provided abroad is transferred to an Indian bank account; at the employee request for the sake of convenience, this Mumbai Income Tax Appellate Tribunal order may help to mitigate/originate lawsuits.

Disclaimer: The content of this post isn't considered to be professional or legal advice, We aren't responsible for any damages arising from your access to the location content & must not be relied on or used as a substitute for legal advice from a lawyer professional in your jurisdiction. CARajput is among India's big digital compliance services platform which committed to helping people have started & developed their businesses. We had started with the goal of creating it easier for start-ups to start out their business. Our main aim is to assist the businessman with applicable laws & regulations compliance and providing support at each & every level to make sure the business stays compliant and growing continuously. For any query, help or feedback you may in touch on singh@carajput.com or Call or what’s-up on 9-555-555-480

Share This Post

Related Articles

Related Videos

Need help?

Request a call
from a RJA
Business Advisor.

LET'S TALK

Private Limited Company

Popular Categories

Browse Blogs

Recent Posts

All about the Equity Linked Savings Scheme & its Returns

All about the Equity Linked Savings Scheme & its Returns

New Functionality of the interest calculator in GSTR-3B

New Functionality of the interest calculator in GSTR-3B

How to respond notices for AIS (Annual Information Statement) mismatch?

How to respond notices for AIS (Annual Information Statement) mismatch?

Payment of TDS via using Form 26QB on sale of property

Payment of TDS via using Form 26QB on sale of property

RBI intends to tokenisation assets, bonds as part of the wholesale CBDC pilot.

RBI intends to tokenisation assets, bonds as part of the wholesale CBDC pilot.

Connect with a RJA Advisor

Fields marked with an * are required

Enquire Us

Please send us your query and we feel very happy helping you

Testimonials

  • Thank you very much for all your help in setting up my new company and clearing up all outstanding business in my sole trader accounts. For the first time in years I have peace of mind regards my business accounts. Your workforce are a credit to you, the girls at reception are so helpful and Chris has been brilliant. It is very much appreciated.

    A US consultancy group

  • Rajput Jain & Associates. are a tremendous value added to me as an executive and a busy parent. It just makes sense to delegate my tax file to them -- they are proactive, extremely service oriented, and most importantly, I am completely confident they are finding every dollar of tax savings available to me.

    A Leading Service Provider

  • We use Rajput Jain & Associates for all our accounting, Corporation tax, VAT and other compliance needs. The service is professional, courteous and prompt. I would recommend Rajput Jain & Associates to any company requiring a comprehensive accounting and tax service.

    A Leading Consultancy Firm in Dubai

Money Back Guarantee

Not happy with the service? You can request a refund at anytime within 30 days!

24/7 Support

Get support through phone, email, mobile app or live chat - 24/7, 365 days.

EMI Payment

Easily pay online with EMI payments, credit or debit card, net banking, PayPal and more.

Get In Touch--

Rajput Jain & Associates

Add: P-60, Connaught Circus, Connaught Place, New Delhi-110001

Email: singh@carajput.com

Phone: 9555555480

Legal Disclaimer--

The information contained on this website merely provides details of our firm to persons who have shown interest in knowing more about us and is not intended to solicit work or advertise our capabilities in any manner. The information provided on this website is general in nature and should not be used as a basis of decision-making without further professional advice. The third party site links are only provided for ready reference of the users and CA Rajput Jain & Associates neither controls their content nor undertakes any responsibility regarding them.

© 2016 Rajput Jain & Associates. All Rights Reserved | Sitemap

Call Email