Foreign Salary Credited Abroad – Is It Taxable in India?

One thing to be careful about is the number of days you spend in India. A colleague unexpectedly became a resident for tax purposes after spending more time in India than planned, and his tax position changed. That's why it's important to determine your residential status every financial year instead of assuming it remains the same.

I work in Singapore and had the same concern last year. The first thing my tax consultant checked was my residential status for that financial year. Since I qualified as an NRI, only my Indian-source income was included in my return. I also reviewed the DTAA provisions, although they didn't affect my salary because it wasn't taxable in India in my case.

I'm an NRI living in the UK and have been filing returns in India for several years. My salary is paid into my UK bank account, and my CA has always treated it as non-taxable in India because I'm a non-resident and the work is performed outside India. I only report my rental income and NRO interest in my Indian ITR.

I work in the UAE, and my salary is credited entirely to my UAE bank account.

For the last few years, I've only reported my Indian rental income and NRO account interest in my Indian tax return. My foreign salary wasn't included because of my tax residency status during those years.

I also keep copies of my overseas salary slips, employment contract, and foreign tax statements, just in case I ever need to explain the source of funds transferred to India.

I had a similar experience after moving to Canada.

During the year I relocated, my tax situation became more complicated because I spent part of the financial year in India and part overseas. My advisor reviewed my travel history before deciding how my income should be reported.

The important thing I learned was not to assume that foreign salary is always treated the same way. Your residential status for the relevant financial year plays a big role, so it's worth confirming before filing.