I’m a mechanical engineer dwelling in Doha (Qatar) for the final 4 years. Is my earnings earned overseas taxable and, if that’s the case, how ought to I pay taxes? —Title withheld on request
Taxability of earnings in India depends upon the residential standing in India, the supply of earnings, and the place of receipt of earnings. The residential standing is set primarily based on a person’s bodily presence in India throughout a fiscal 12 months (FY), together with work days and non-work days, and the previous 10 FYs. For Indian residents, even when they don’t change into residents primarily based on bodily presence in India, they’ll nonetheless change into resident however not ordinarily residents primarily based on the absence of legal responsibility to pay tax in another nation or territory by motive of domicile or residence or another standards of the same nature, if India sourced earnings exceeds ₹15 lakh. Residential standing is dynamic and wishes contemporary dedication for every FY.
A person qualifying as resident and ordinarily resident (ROR) is taxable on his worldwide earnings in India and is required to report all international property within the India earnings tax return. Additionally, the earnings earned from such international property through the related FY together with nature of earnings and head of earnings below which such earnings has been supplied to tax within the India earnings tax return must be reported in relation to every international asset.
A person qualifying as non resident (NR) or resident however not ordinarily resident (RNOR) is taxable on the next: earnings accruing or arising in India;. earnings deemed to accrue or come up in India; earnings obtained or deemed to be obtained in India; cncome accruing or arising outdoors India if the earnings is derived from enterprise managed in or occupation setup in India (for RNOR).
As you might have been outdoors India for previous 4 years, it’s probably that you could be qualify as non-resident of India, assuming your India sourced earnings is lower than ₹1,500,000. As a non resident, wage earned for employment exercised outdoors India and obtained outdoors India is not going to be taxable in India. If wage earnings for employment exercised outdoors India is straight obtained in India, it is going to be taxable within the nation.
Your private earnings in India comparable to curiosity earnings from banks, dividend earnings from shares, mutual funds, and many others, rental earnings from home property in India might be taxable in India. You will want to deposit earnings tax by the use of advance tax in 4 instalments (15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March) or earlier than submitting of a tax return by the use of self-assessment tax together with curiosity by 31 July.
Sonu Iyer is tax associate and other people advisory companies chief, EY India.