Your Taxes

I have taken up employment in Singapore from March 28, 2016 and I am already paying taxes for my salary earned here in this country. If I transfer some currency to my Indian account, would that be considered taxable in India? Do I need to pay any taxes in India for my salary earned here for the year 2016-2017?

Bharat Agarwal

Based on the limited facts available, I understand that you are an Indian citizen who has gone abroad for employment and are receiving salary outside India, which is being subsequently remitted by you to your India bank account. Further, I presume that during the complete FY 2016-17, you would be working in Singapore and visiting India for personal purposes, the duration of which will be less than 182 days.

As per the provisions of the Income-Tax Act, 1961, the scope of taxation of a person depends on the residential status of that person in the relevant financial year. Based on the above stated facts, you would qualify as non-resident in India for the financial year 2016-17 and would be required to pay taxes only in respect of your incomes earned/received in India. Thus, the salary income earned by you from your employment abroad shall not be taxable in India even if the same is being subsequently remitted by you in the India bank account.

In case your physical stay in India exceeds 182 days during financial year 2016-17 or you return to India after ending your employment in Singapore and your physical stay during the said financial year exceeds 60 days, you may qualify as Ordinarily Resident in India, subject to the other specified conditions.

In such a case, you would be taxable in India on your global incomes and shall be required to report the Singapore salary income in the income-tax return to be filed in India. Based on the provisions of Double Tax Avoidance Agreement between India and Singapore, as applicable to the facts of your case, you may claim the benefit of either exclusion of income or credit for the taxes paid in Singapore against your tax liability in India on such salary income, to mitigate the impact of double taxation.

I pay premiums on life insurance policy and make PPF investments for my spouse. Can these be shown as deductions from my income for claiming tax benefit?

Sathish Kumar

As per the provisions of the Income-Tax Act, 1961, an individual may claim deduction for eligible insurance premium paid to keep in force a life insurance and the contributions made to public provident fund for self, spouse and children. I understand that you are making payments toward the insurance premium and the public provident fund for yourself and your spouse. Thus, you may claim the deduction for such payments under provisions of Section 80C of the Act up to a maximum eligible limit of ₹1,50,000 (for financial year 2016-17) while filing your Income-tax return.

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

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