I came across an article in Mint about taxation of global income in India for a resident citizen. If a taxpayer is a resident for FY17-18, even though he was in the UK from July 2014 to July 2017 and got the salary from April to July 2017 from his UK office, why won’t the salary for April-July 2017 be taxable in India? Won’t this be counted as foreign income, and thus taxed in India? —Sumukh Jois
In the said question, the taxpayer was resident but not ordinarily resident in India (RNOR). Those who have RNOR status are taxed almost the same way as NRIs, so they only have to pay tax on income that was paid to them in India or was accrued or earned in India. The taxpayer was RNOR and if his salary was paid in the UK, there was no need to declare it in the Indian income tax return. Had the taxpayer received or earned the UK income in India, he would have to include it in his India income tax return. Once his status changes to resident in India for tax purposes, income earned anywhere in the world would have to be shown in India’s income tax return and tax paid on it.
