Recently, the Authority of Advance Ruling (AAR) has held in the case of Shri Anurag Chaudhary (AAR No. 839 of 2009) that an employee who has left India for the purpose of employment outside India would qualify as a non resident, if he was present in India for less than 182 days during a financial year (From 1st April to 31St March) . Further, it was held that the salary earned on account of employment outside India would not be taxable in India.
Facts of the case
- An employee of an Indian company (‘the assignee’) was posted outside India for the purpose of employment with the group company in the USA.
- The assignee left India on 31st March 2008 (financial year 2007-08) and returned to India on 29th November 2008 (financial year 2008- 09). He was present in India for 123 days during the financial year 2008-09.
- In the application filed before the AAR, the assignee claimed to be a non resident in the financial year 2008-09.
- No information was available regarding assignee’s stay in India during the four financial years preceding the financial year 2008-09 with the AAR.
Issue before AAR
Whether the salary earned by the assignee by virtue of his employment outside India during the financial year 2008-09 was liable to be taxed in India?
Assignee’s contention before AAR
The assignee did not appear in person or through authorised representative before the AAR.
Department’s comments
The tax department clarified that the assignee may be treated as NRI as he remained in India for 123 days during the financial year 2008-09.
Decision of the AAR
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