Salary
to Expats including Foreign Directors FAQ`s?
Q) Can Indian
subsidiary pay salary to expats including Foreign Directors?
Ans: Yes, If the
Expats are contributing towards the management and operation of Indian Company,
the Indian company can pay salaries to the Expats including foreign directors.
Q) Are there any
special provisions related to salary payments as per FEMA?
Ans: Yes, The
FEMA provisions are different for the Expats who are not permanent residents
and are sent on deputations and the permanent residents.
In case of non-permanent
residents, there is no bar on repartiation and Expats can remit his entire net salary
(excluding taxes, contributions to PF and other statutory deductions) abroad
for
maintenance of his family without any prior
permission from RBI.
However in case of permanent residents prior
approval of RBI is required if the amount exceeds US$ 1,00,000 per person per
annum.
Q)
Does company law prohibits payment of salary to foreign Directors?
Ans:
There is no law in India which prohibits payment of salaries to Foreign
Directors.
Q)
What are the TDS (Witholding) and Income Tax provisions?
Ans: Income Tax as per the provisions of The
Income Tax Act, 1961 has to be paid on
the entire salary accrued/paid to such EXPAT
employee in India.
In case of a foreign expatriate working in India,
the remuneration received by him, under the head ‘Salaries’, is deemed to be
earned in India ,if it is payable on account of services rendered in India as
per the provision of Section 9(1)(ii) of the Income Tax Act. Thus the
Income is taxable in India.
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ReplyDeleteThanks for sharing about salary to expats including foreign. TDS on salary must be deducted according to the income tax slab. The employer must evaluate all deductions and investments of the employee. You can also check out about TDS Return For Salary here.
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