Indian Tax Implications - Income in $ or Rs

uy663z · Post by **uy663z** » Wed Feb 07, 2007 11:37 am

Hi

I have been offered the opportunity to set up operations in India for my company. It is a two year assignment and extensible by mutual consent. I am a US citizen.

I have the choice of taking the compensation in either $ in the US or Rupees in India. My company does not have prior experience with any of this, hence the questions here. I have looked through relevant threads and I am still a bit confused.

Questions:
1) From a tax perspective, is it better to take it in Rs or take it in $ or does it matter at all? While we want to think of this as an extensible long term assignment and maybe permanent relocation, we are not certain.
2) If I take it in $, should I ask for a portion of my base to be paid as housing allowance (or rent reimbursement) and/or car allowance? I have read docs in this forum as well as the PWC document and I remain confused. Does any of this actually result in any material change in taxes in India? Could I take advantage of any such allowance (to reduce my Indian tax) if it is paid out in $ in the US while I am working in India?
3) How would my stock options be treated in India if I do cashless exercise? How about my Employee Stock Purchase Plan?
4) Can anyone recommend a tax consultant or accountant I could retain in Bangalore who could provide me advise and also prepare my tax returns in India and for US filing? Rough idea what this would cost?

Anything else I should think about? I have flexibility in how I want to structure this and that flexibility, paradoxically :confused:, makes it more complicated.

Thanks
UY

return2blore · Post by **return2blore** » Wed Feb 07, 2007 3:52 pm

Hi UY

Just yesterday I posted this info on this forum. Take it once again now :

Mr. Gurunath,
080-26717541/42
[email protected]

You may want to discuss the rates with him.

return2blore

whiteash · Post by **whiteash** » Thu Mar 01, 2007 4:25 pm

Hello,
I'm in a somewhat similar situation and just created a thread today. Can anyone recommend a CA/ tax advisor in the Delhi NCR or Gurgaon area?

Thanks

Bobus · Post by **Bobus** » Thu Mar 01, 2007 9:12 pm

I have looked through relevant threads and I am still a bit confused.

Which ones? Did you look at the one below? It is just few threads below this thread.

http://www.r2iclubforums.com/clubvb/showthread.php?t=1072

Whether you receive the money in $ or Yuan or whether you receive the money in Hongkong or Switzerland will make no difference to GOI tax liability, if work is done in India, per Indian domestic tax law.

nand · Post by **nand** » Fri Mar 02, 2007 2:04 pm

If you get paid in $, you may want to find out if you are eligible for the up to 80K or so foreign earned income exclusion. I am not sure if expats on a short term assignment are eligible for that.