Tax Rules for Resident Individual Recently Moved Abroad

When an Indian resident travel to another country for a temporary work assignment, it will be termed as “Resident individual on a temporary foreign assignment”.

How are you Taxed When You are a Resident Individual Recently Moved Abroad

For example Prashant travelled to US for a new work assignment. His earnings from US are credited into an Indian NRE account. He is having some FD’s and some money as savings in Indian bank account. He received Form 16 from his Indian employer. Whether he should file tax return in India or not?

Every Individual (whether NRI or not) has to mandatorily file Income tax return in India if his or her income exceeds Rs. 250000 in a Financial year. NRI’s are only taxed for the income earned or collected in India. Hence, Prashant needs to pay tax on the income which he has earned in India including the bank interest he has earned from FD’s and savings accounts.

Prashant’s income from India
Income from Indian employer	Rs.4,00,000
Interest income from FDs	Rs.20,000
Bank account savings interest	Rs.5500
Gross total income	Rs.4,25,500
Deductions
Section 80C – PPF investments	Rs.30,000 (Claim upto 150000)
Section 80TTA exemption	Rs.5,500 (Claim up to 10000)
Taxable income	Rs.3,90,000
Tax slab at 5%	Rs.7000
Cess at 3%	Rs.210
TDS deducted by employer	Rs.5000
TDS deducted by bank	Rs.5,500
Tax Refund	Rs.3290 (10500 – 7210)