I am employee of a Private Engineering Collage. I am doing post doc research in France. My status is as follows: I am getting salary of from my employer in India for which TDS is deducted (I am on paid study leave). I am getting a salary of in France for which I will pay tax according to French tax rules. I am here for a period of 1 year Nov 2009 -Dec 2010. Financial year in France is 1st Jan -31st Dec. I am sending some euro every month to India for family maintenance (wife and 2 kids). How much tax I have to pay in India for assessment year 20010-20011 and 2011-2012? Do I need to pay taxes in India for my earning in France?
Ritesh Kumar Singh , Ranchi
First of all , for the Fy 2009-10 , you seems to be resident of India , therefore whatever you earn outside India , shall be taxable in India for Fy 2009-10 (Asst Year 2010-11) and for FY 20010-11 , you will be out of India for more than 182 days for the purpose of employment , therefore , earning in France shall not be taxable for FY 2010-11 *(Asst Year 2011-12).
Relief from Double taxation in FY 2009-10
India and France has Double Taxation Avoidance Agreement. Article 25 of DTA between India & France provides that if such income which is already taxed in France shall be given deduction of tax paid in France , if it is again taxed in India. Under Income Tax Act , there is specific provision for relief in case of double taxation . In that case ,section 91 of the I T Act provides relief from double taxation. Provision of Section 91 of the I T Act says “(1) If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal” So, you should show the income earned in France for FY 2009-10 and claim tax credit of tax paid in France for that period. Therefore, it is in your interest , that necessary tax deduction or payment certificate is kept ready in your record which may be required by Income tax department in case your case is scrutinised. For FY 2010-11 In my opinion, the income earned in FY 2010-11 is not taxable in India and whatever you earn and given to any body who is relative like your family members , is neither taxable in your hand nor in their hand.
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