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Hi All,

If an NRI visits India during a fiscal year (total less than 180 days) and still get paid by US employer in US is his income taxable?

I read a post wherein the Income tax officer has considered it as income from professional setup in India although in that case the status of OP was NROR.

Please advise.

Regards

This is a very intriguing situation.

Strictly speaking if he is working while in India than he has to pay indian taxes.

At the same time, when I worked in an MNC in India, we used to have foreign managers come on a management trip. They were working, that is not on a holiday but doing meaningful work for the company, but they were never taxed and even today, i know several persons come here on mamnagement trips, but there is never a question of their having to pay tax here.

I had gone out on training assignments to some countries and my visa was obtained as a trainer, but there was never a question of my salary being taxed in those countries.

dbs;395445This is a very intriguing situation.
Strictly speaking if he is working while in India than he has to pay indian taxes.
At the same time, when I worked in an MNC in India, we used to have foreign managers come on a management trip. ...

Time spent is a criterion often used by the tax authorities in considering whether or how much tax to pay. In OP's case, this < 180 days would be a situation that is pretty relevant for filing taxes.
http://www.investmentyogi.com/taxes/the-difference-between-resident-non-resident-and-not-ordinarily-resident.aspx
If someone came on a trip for a period of a few weeks on a tourist visa and within the company it is called a "management trip", then s/he is not taxed.....s/he is probably not "working". A few days to get over the jet-lag, a few business dinners, some golf, or some other local cultural activity etc... will eat up the time. Having meetings with the local (subsidiary) personnel could be management work....but then, it could just be banter in a nice A/C room, may be with some props and business data. Work ? While in India ? We hire people to do that, don't we ?

Lady Glossop: Do you work, Mr. Wooster?
Bertie Wooster: What, work? As in honest toil, you mean? Hewing the wood and drawing the old wet stuff and so forth?
Lady Glossop: Quite.
Bertie Wooster: Well... I've known a few people who worked. Absolutely swear by it, some of them.

From another thread
"1. An Indian citizen returning to India ; continuing to work for US company and also paid by US company in US$ in USA or India will have implications of Income Tax Act, 1961 [IT Act] and Double Tax Avoidance Agreement (DTAA) between India and USA.
.02 The said Treaty provides for taxation of salary income payable by US company to a person discharging duties in India to be taxed in USA if the stay does not exceed 183 days in India."

So if I go by this then NRI case it will not be taxable in India. Am I right?

The said income accruing to NRI working for US Company shall not be taxable in India provided 3 conditions are met:
(a) the NRI is present in India for a period not exceeding in the aggregate 183 days in the relevant taxable year ;
(b) the remuneration is paid by US employer
(c) the remuneration is not borne by a permanent establishment or a fixed base or a trade or business of the US Employer in India.

Anuj

anuj106;417300The said income accruing to NRI working for US Company shall not be taxable in India provided 3 conditions are met:
(a) the NRI is present in India for a period not exceeding in the aggregate 183 days in the relevant taxable year ;
(b) the remuneration is paid by US employer
(c) the remuneration is not borne by a permanent establishment or a fixed base or a trade or business of the US Employer in India.

Anuj

What if I reside in India for more than 183 days but actually work for only 90 days or so? The remaining time is just unemployed/vacation time. Is it still taxable?

If the stay in India exceeds 183 days then the concerned person shall become RNOR .Since the conditions as enumerated above are not fulfilled, the income so received shall become taxable in India. Offcourse credit for the taxes deducted in USA shall be available in India.

Anuj
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