Table of Contents
1. When is salary deemed to accrue or arise in India?
- Salary payable by Indian government to Indian citizen for services rendered outside India – under section 9(1)(iii).
- Salary payable to any person in respect of services rendered in India – under section 9(i)(ii).
2. Whether salary paid on maternity leave or rest period taxable?
- As per section 9(1)(ii) any amount that is paid as part of the contract of employment for services rendered in India will be deemed to accrue or arise in India.
3. I am an Indian citizen working in an Indian consulate in Bahrain and receive salary from the Indian government, is the amount taxable in India?
- Yes, as per section 9(1)(iii) of the Income Tax Act, salary payable by Indian government to Indian citizen for services rendered outside India are deemed to accrue or arise in India and hence taxable in India.
- However, allowances and perquisites provided to such persons by the government of India for rendering services outside India are exempt under section 10(7)
4. Whether the salary received by such persons is taxable at a flat rate?
- No, there are certain allowances and Deductions allowed to salaried individuals under the act which can also be claimed by non-resident individuals.
- The income is not taxed at a flat rate but according to the tax slabs applicable to an individual.
5. Can a non-resident individual claim the benefit of basic exemption limit as per the applicable income tax slab?
- Yes, non-resident individuals can claim the benefit of basic exemption limit of Rs.2,50,000.
6. Are senior and super senior non-residents eligible for a higher basic exemption limit?
- The higher basic exemption limits are applicable only in respect of resident senior and super senior citizens.
- Non-residents can claim the benefit of only Rs.2,50,000 as basic exemption limit irrespective of their age.
7. Is Rebate under section 87A applicable to non-residents in respect of salary earned for rendering services in India?
- No, rebate under section 87A of the income tax act, 1961 is applicable only to resident individuals.