Income Tax Filing for Foreign Nationals

Income Tax Filing for Foreign Nationals

Who is a foreign national or an expatriate?

An expatriate is an individual who comes to live in India but not a citizen of India.

Whether an expatriate is liable to pay tax in India?

Yes, an expatriate is liable to pay tax in India even though he is a citizen of a foreign country. Any income earned by an expatriate by working in India or providing services in India will be taxable in India regardless of his or her residential status or foreign national citizenships. If your total income in India is less than the limit specified by the income tax department i.e. Rs. 250000, you will be exempted from tax and may eligible for refund while filing income tax return in India.

How an expatriate income taxed if he or she is an Indian resident?

Taxability of an individual income depends upon his or her residential status. If you are an Indian resident, you need to pay tax in India on entire income earned by you anywhere across the globe.

In case if expatriate is having a residential status of NRI or a resident but not ordinarily resident (RNOR), the income earned in India will be taxable in India only.

The first step for every individual is to identify his or her residential status. As per the rules specified in the income tax act, 1961 for the residential status, expatriate enjoys RNOR status for the first 2 years after arriving in India & only pay tax on the income earned by him in India.

Whether a foreign national take benefit of DTAA or not?

Double taxation avoidance agreement (DTAA) is an agreement between the two countries to avoid paying double tax on the same income.

In case you are earning income in a foreign country and paying tax there and on the same income, you are bound to pay tax in India too, you can take the benefit of DTAA with the help of a CA.

For Example –

Ekaterina is a foreign national working as a teacher for an international school in Delhi from last 1 year. She is a resident of United Kingdom and receiving 1000 pounds per month as a salary for her work at school in India. Whether Amanda will be taxed in India for the salary she is earning in India or not?

Ekaterina is receiving 12000 pounds as a salary from her teaching work and she has to pay Indian tax as she is earning in India. School is deducting Rs. 400000 TDS from her income. As per income tax act, 1961, Ekaterina is an NRI and every NRI needs to pay his or her tax on the income earned in India.

Ekaterina paid Rs. 400000 as TDS to the income tax department as a final tax liability. In case, the same amount is taxable in UK, you can take the benefit of double taxation avoidance agreement (DTAA) and avoid paying taxes in both the countries.

MEET US

What Clients Say

Customer delight is our main goal and we are very serious about it.


Prakash Verma

Prakash Verma

“Finacbooks.com is a perfect example of a great customer service dealing with the best of accountancy services.“

Prakash Verma Signature


Praveen Chauhan

Praveen Chauhan

“They offered us good quality services in a least possible time at a best Price.“

Praveen Chauhan Signature


Pradeep Kochhar

Pradeep Kochhar

“Finacbooks.com is a trusted network of highly qualified accounting professionals who not only provided us quality accountancy services but also supported us by answering our each & every query on time without any delay. “

Pradeep Kochhar Signature

Informational, useful and resourceful

Blogs

Catch up our trending topics, news etc. in a simple, detailed and most professional way.

Section 194IC of Income Tax Act: TDS on Payment under Joint Development
08 Sep, 2020

What is Section 194IC of the Income Tax Act Any person who is paying rent to a land owner (owner of land or building or both) under the... Read More

Section 194IA of Income Tax Act: TDS on Property Purchase of Immovable Property
31 Aug, 2020

Section 194IA of the income tax act As per section 194IA of the income tax act, it is mandatory for a buyer of immovable property (except... Read More

Section 194IB of Income Tax Act: TDS on Rent paid by Individuals or HUF
31 Aug, 2020

What is Section 194IB of the income tax act? As per section 194IB of the income tax act, it is mandatory for individuals/HUF’s who are... Read More

CONTACT US

We Are Everywhere

We are having a wide network operating all across India as well as Internationally.
World Map

Contact Us


30+ Offices in
India

10+ Years Experience

Save Your
Time

Quick Turn around Time

Qualified Professionals

Excellent Customer Service

CONNECT WITH US

Reviews

We value client relationships and making it better with each passing day.

Rated 4.5 out of 5 based on 1,234 reviews on FinacBooks Logo


Sign up to our

Newsletter

Tax news for chartered accountants, businesses and individual.