Tax on Dollar Remittance….

POSTED BY Samir ON August 14, 2012 4:22 am COMMENTS (12)

Dear Experts,
I have a question about tax on remittance.

I work for a Indian IT company. My company sent me to USA thru its USA subsidiary on H1B visa (typically how all IT company send). I get my USA Salary in USA $, I don’t get any Rs. salary in India.

For last 2.5 year I am in USA.

I transfer some dollars every month to my own Indian savings account to take care of my loan obligations and family support.

I pay tax in tax in USA on my USA salary.

Question –

1) Will India Tax Dept, consder this transfer of money as my Indian Income?
2) Will I be liable to pay tax, even when I am not residing in India
3) Do I need to file any return? even when I am not residing in India.

Thanks in advance for your help.

Warm Regards
Samir

12 replies on this article “Tax on Dollar Remittance….”

  1. Harsha Vardhan says:

    Thanks Ashal for this and all the other great information you are sharing on this forum…

  2. Harsha Vardhan says:

    Dear all,
    I have a connected question- The tax implications are clear between the NRE and normal bank accounts. But I read at some forums that it is illegal for a NRI to maintain a normal SB account and to send money from abroad to such an account (we need to have an NRE account). Can somebody here confirm this?

    1. Dear Harsha, Yes the normal account should be converted to NRO.

      Thanks

      Ashal

  3. Samir says:

    Thanks Gaurav… Now I am very clear…

    Thanks to everybody….Appreciate inputs and help.

    1. BRSINGH says:

      Hi Sameer,

      Gaurav is correct. Also i did not pay a single penny as tax when i was in London. I used to transfer around 1L every month to India.

  4. Gaurav says:

    You are not liable to pay income tax on the money you remit to India. If the money you remit earns interest in an account held in your name, then it is taxable in normal tax slabs. your US income is not added to calculate tax. if the money you remit is in an NRE account then the interest is tax free.

    Example: Assuming you have no other income in India:
    you earn interest of 1L in a normal bank account, it is taxable, but you are below the 10% slab so no tax payable.
    you earn interest of 6 L in a normal bank account, it is taxable and you play tax based on the tax slab you fall under.
    you earn interest of 6 L in a NRE account, it is not taxable.

  5. Karthik says:

    Hi Samir,

    my view is: no tax if – no income in India, your complete income is from US and you live in the US.

    and, No Remittance tax https://articles.economictimes.indiatimes.com/2012-07-04/news/32525086_1_oommen-chandy-somalian-pirates-service-tax

    1. Samir says:

      Karthik,
      I also read that artical sometime back. But I think that is about service tax…
      Not sure about income tax on such remittance…

      BRSingh,
      Did you consulted any Income tax guy after coming from London…

      I think the situation I am in, should be with many folks… (most of the IT folks go to long term onsite)… so a clear answer in this forum will help many….

  6. Samir says:

    Thanks Yogesh/BR/Karthik.

    So Yogesh you are saying remittance is taxable…???

    BR/Karthik what is your take…

    BR while you were in London, did you sent money to India?

  7. Karthik says:

    If you live in USA for a complete Financial year and earn only from US (no income from India),
    Then you don’t need to pay any income tax in India, and don’t need to file it in India.

  8. BRSINGH says:

    “If you have lived in India for more than 182 days in a financial year, you will be considered a resident of India under the Income Tax Act. So your income, including the one earned abroad, will be taxable in India. However, you may get benefit under the Double Taxation Avoidance Agreement if the income earned abroad is taxable in that country. If there is no such agreement between India and that country, check if you can get any benefit under Section 91.”

    During 2010-2012 i worked in London and neither i payed any tax nor i had to file return in India. I am sure you don’t have to pay any tax or file return in India.

  9. Yogesh Pandey says:

    Hi Sameer, Yes. Tax will be applicable on amout if it goes beyond the tax limit. You should open an NRE saving account from any Indian bank to get rid of tax as tax is not applicable on NRE saving account.

    IDBI, HSBC, Kotak, HDFC & ICICI these banks provide facility to open NRE Saving account online.

    Regards,
    Yogesh

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