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Business News/ Money / Calculators/  Income abroad taxable if stay in India is more than 182 days
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Income abroad taxable if stay in India is more than 182 days

The salary income earned in foreign currency would have to be converted into rupees

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A salaried employee has worked in India for eight months and received salary in India, and for the rest of the four months, he was transferred abroad and received salary there. How will the tax be calculated for income in India and abroad? Will the money received in foreign currency be taxable after converting to Indian rupees?

—Vikas Jain

Your residential status for the relevant financial year would depend on the number of days stayed in India. Considering that you have stayed in India for eight months, i.e., 244 days, you would qualify as a resident in India for income tax purposes. As a resident of India, the entire income earned by you in India or outside India would be taxable in India. Therefore, the salary income earned by you in India as well as outside India would be taxable in India for the relevant financial year.

The salary income earned in foreign currency would have to be converted into rupees using the SBI TT buying rate as on the last day of the month immediately preceding the month in which the salary is due or is paid in advance or in arrears. For example, to convert the salary due for May, the exchange rate as on 30 April will have to be applied.

I left India on 1 June 2009 for employment in Qatar. After the end of service (retirement) in September 2015, I will go back to India permanently. In the year 1 April 2015 to 31 March 2016, I am likely to be in India for more than 182 days because of retirement. What will be the income tax implication on the earning (April-September), which I will receive as salary while working in Qatar? Please explain in detail.

—Alok Saha

Any person staying in India for more than 182 days during a relevant financial year shall be considered a resident of India for tax purposes and the entire income earned in or outside India would be taxable in India.

Therefore, the income earned by you during the April-September 2015 period would be taxable in India. However, taxes would be payable by you only when your salary income for the said period along with any other income earned by you in or outside India exceeds the basic exemption limit prescribed under income tax laws in India.

Apart from this exemption, you could consider claiming credit for the taxes paid (if any) in Qatar against your Indian income tax according to the India–Qatar double taxation avoidance agreement.

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Published: 12 Mar 2015, 07:33 PM IST
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