Foreigners are entitled to certain special
concessions as follows.
- Remuneration received by a foreigner as an employee of a foreign
enterprise for services rendered in India is not subject to Indian
income tax, provided :
- The foreign enterprise is not engaged in any trade or
business in India;
- The foreigner is not present in India for more than 90 days
in that year; and
- The remuneration is not liable to be deducted in computing
the employer's taxable income in India.
Note: In a treaty
situation, the 183-day rule applies.
- A foreigner (including a nonresident Indian) who was not resident
in India in any of the four financial years immediately preceding
the year of arrival in India is entitled to a special tax
concession, if :
- The foreigner has specialized knowledge and experience in
construction or manufacturing operations, mining, generation of
electricity or any other form of power, agriculture, animal
husbandry, dairy farming, deep-sea fishing, shipbuilding,
grading and evaluation of diamonds for diamond export or import
trade, cookery, information technology (including computer
architecture systems, platforms and associated technology), a
software development process and tools, or such other fields as
the central government may specify; and
The individual is employed in any business in India in a
capacity in which specialized knowledge and experience are used.
Note: During the first 48 months commencing from the
date of arrival in India, the remuneration will not be subject to
any further tax in such a foreigner's hands if the employer bears
the tax on the remuneration.
- A visiting foreign professor who teaches in any university or
educational institution in India land whose contact of service is
approved by the central government is exempt from tax on
remuneration received during the first 36 months from the date of
arrival in India, provided the teacher was not resident in India in
any of the four financial years immediately preceding the year of
arrival in India. If the foreigner continues in employment in India
thereafter, the remuneration of the following 24 months is taxable;
however, if the tax is paid by the university or education
institution, there is no further tax liability.
- Salary received by a nonresident foreigner in connection with
employment on a foreign ship is exempt from tax if the employee's
stay in India during a year does not exceed 90 days.
- Special exemptions under specified circumstances are available
for the following :
- Amounts receivable from a foreign government or a foreign
body by a foreigner for undertaking research in India under an
approved scheme;
- Remuneration received by employees of a foreign government
during training with the Indian government or in an Indian
government undertaking (applicable to individuals assigned to
India under cooperative technical assistance programs in
accordance with agreements between the Indian government and a
foreign government); and
- Remuneration received by nonresident expatriates in
connection with the filming of motion pictures by nonresident
producers.
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