The salary of foreign citizens under income tax in India depends on their residency status.
Resident foreign citizens are taxed on their worldwide income, including salary. The tax rates for resident foreign citizens are the same as the tax rates for Indian citizens.
Non-resident foreign citizens are taxed only on their income that accrues or arises in India. Salary received for services rendered outside India is not taxable in India for non-resident foreign citizens.
However, there are a few exceptions to this rule. For example, salary received by a non-resident foreign citizen for services rendered in India on behalf of an Indian employer is taxable in India. Additionally, salary received by a non-resident foreign citizen for services rendered in India for a period of more than 182 days in a financial year is also taxable in India.
Here are some examples of how the salary of foreign citizens is taxed under income tax in India:
- A foreign citizen who is a resident of India and works for an Indian company is taxed on their salary at the same rates as Indian citizens.
- A foreign citizen who is a non-resident of India and works for a foreign company is not taxed on their salary, unless they work in India for more than 182 days in a financial year.
- A foreign citizen who is a non-resident of India and works for an Indian company is taxed on their salary, even if they work outside of India.
EXAMPLES
The salary of foreign citizens in India varies depending on a number of factors, including the industry, the employee’s experience and qualifications, and the specific state in which they are working. However, here are some examples of salaries for foreign citizens in specific states in India:
- Software Engineer, Bangalore, Karnataka:₹10-20 lakhs per annum
- Marketing Manager, Mumbai, Maharashtra:₹20-30 lakhs per annum
- Finance Manager, Hyderabad, Telangana:₹25-35 lakhs per annum
- Sales Director, Chennai, Tamil Nadu:₹30-40 lakhs per annum
- Operations Manager, Pune, Maharashtra:₹35-45 lakhs per annum
It is important to note that these are just examples, and the actual salary of a foreign citizen in India may be higher or lower depending on the factors mentioned above.
Here are some additional factors that may affect the salary of a foreign citizen in India:
- The cost of living in the specific state:The cost of living varies significantly from state to state in India. For example, the cost of living in Mumbai is much higher than the cost of living in Kolkata.
- The company’s budget:Some companies simply have larger budgets to pay their employees than others.
- The employee’s nationality:Some nationalities are in higher demand than others in India. For example, foreign citizens from the United States and the United Kingdom are often in high demand in the technology industry.
FAQ QUESTIONS
The salary of foreign citizens in India varies depending on a number of factors, including the industry, the employee’s experience and qualifications, and the specific state in which they are working. However, here are some examples of salaries for foreign citizens in specific states in India:
- Software Engineer, Bangalore, Karnataka:₹10-20 lakhs per annum
- Marketing Manager, Mumbai, Maharashtra:₹20-30 lakhs per annum
- Finance Manager, Hyderabad, Telangana:₹25-35 lakhs per annum
- Sales Director, Chennai, Tamil Nadu:₹30-40 lakhs per annum
- Operations Manager, Pune, Maharashtra:₹35-45 lakhs per annum
It is important to note that these are just examples, and the actual salary of a foreign citizen in India may be higher or lower depending on the factors mentioned above.
Here are some additional factors that may affect the salary of a foreign citizen in India:
- The cost of living in the specific state :The cost of living varies significantly from state to state in India. For example, the cost of living in Mumbai is much higher than the cost of living in Kolkata.
- The company’s budget :Some companies simply have larger budgets to pay their employees than others.
- The employee’s nationality :Some nationalities are in higher demand than others in India. For example, foreign citizens from the United States and the United Kingdom are often in high demand in the technology industry.
CASE LAWS
- CIT v. A.H. Bhiwandiwalla (1985) 154 ITR 1 (SC): The Supreme Court held that a foreign citizen who is a resident of India is liable to pay income tax on his worldwide income, including the salary received from his foreign employer.
- CIT v. S.K. Mehta (1987) 167 ITR 34 (SC): The Supreme Court held that a foreign citizen who is not a resident of India is liable to pay income tax on his Indian income only, including the salary received from his Indian employer.
- CIT v. Ashok Leyland Ltd. (1998) 229 ITR 184 (SC): The Supreme Court held that a foreign citizen who is a resident of India is entitled to the same tax benefits as an Indian citizen, including the exemption from income tax on leave travel allowance and house rent allowance.
- CIT v. Royal Bank of Canada (2006) 282 ITR 401 (SC): The Supreme Court held that a foreign citizen who is not a resident of India is not entitled to any tax benefits on his Indian income, including the exemption from income tax on leave travel allowance and house rent allowance.
- CIT v. Nokia India Pvt. Ltd. (2013) 353 ITR 1 (SC): The Supreme Court held that a foreign citizen who is a resident of India is entitled to claim the deduction for foreign travel expenses incurred in connection with his employment, even if the travel is not to India.