The salary and allowances received by a teacher/professor from a SAARC member state is exempt from income tax in India, subject to certain conditions. The conditions are as follows:

• The teacher/professor must be a citizen of a SAARC member state.
• The teacher/professor must be employed by an educational inscstitution in India.
• The teacher/professor’s stay in India must not exceed two years.

If the teacher/professor’s stay in India exceeds two years, then the salary and allowances received by them will be taxable in India.

The exemption for salary and allowances received by teachers/professors from SAARC member states is provided under section 10(6)(vii) of the Income Tax Act, 1961. This exemption is in line with the provisions of the SAARC Agreement on Movement of Persons, which aims to facilitate the movement of teachers and professors between SAARC member states.

• The exemption applies to the salary and allowances received by the teacher/professor, and do not extend to any other benefits or perquisites that they may receive under Income Tax Act.
• The exemption is only available for the first two years of the teacher/professor’s stay in India. If their stay exceeds two years, then the salary and allowances will be taxable in India from the third year onwards under Income Tax Act.
• The exemption is subject to the provisions of the Income Tax Act, 1961, and any rules or regulations made there under.

EXAMPLES

• Salary received by a teacher / professor from Bhutan, Bangladesh, Nepal, Sri Lanka, Pakistan, or Maldives for teaching or research purposes in India, for a period of up to 2 years, is exempt from income tax in all states of India under Income Tax Act.
• Salary received by a teacher / professor from Afghanistan for teaching or research purposes in India, for a period of up to 5 years, is exempt from income tax in all states of India under Income Tax Act.
• The exemption from income tax is available only if the teacher / professor is a resident of a SAARC member state and is not a citizen of India under Income Tax Act.
• The exemption is also available only if the teacher / professor is employed by an educational institution that is approved by the Government of India under Income Tax Act.

• A teacher from Nepal who is teaching at a university in Delhi is exempt from income tax in Delhi.
• A professor from Bangladesh who is doing research at a research institute in Mumbai is exempt from income tax in Mumbai.
• An Afghani teacher who is teaching at a school in Chennai is exempt from income tax in Chennai.

Faq questions

• Is the salary received by a teacher/professor from a SAARC member state taxable in India under Income Tax Act?

A: Yes, the salary received by a teacher/professor from a SAARC member state is taxable in India, if the teacher/professor is resident in India.

• Q: What is the definition of “resident” in this context under Income Tax Act?

A: A person is considered resident in India if he/she: * Stays in India for 182 days or more in the current year, or * Stays in India for 60 days or more in the current year and 365 days or more in the preceding four years, counting the current year.

• Q: What are the exemptions available to teachers/professors from SAARC member states under Income Tax Act?

A: The following allowances are exempt from tax for teachers/professors from SAARC member states: * Children’s education allowance up to Rs. 100 per month per child. * Hostel expenditure allowance up to Rs. 300 per month per child. * Leave travel allowance for self and family. * Medical allowance. * Conveyance allowance. * House rent allowance.

• Q: What are the taxable perquisites for teachers/professors from SAARC member states under Income Tax Act?

A: The following perquisites are taxable for teachers/professors from SAARC member states: * Value of rent-free accommodation provided by the employer. * Value of any concession in the matter of rent for accommodation provided by the employer. * Value of any benefit or amenity granted or provided free of cost or at concessional rate, such as car allowance, medical reimbursement, etc.

• Q: How is the tax calculated for teachers/professors from SAARC member states under Income Tax Act?

A: The tax is calculated in the same way as it is for other residents of India. The teacher/professor’s total income, including salary, allowances, and perquisites, is taxed at the applicable slab rates.