Amity Business School

Summer Internship report on

COMPLIANCE OF TAXATION FOR

EXPATRIATES IN INDIA
Under the supervision of
Dr. ASHOK SHARMA

By-
NEHA RAWAT
A0101915181
2015-17
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INTRODUCTION

The project Compliance of taxation for expatriates in India deals with

the assessment of the taxes of the expatriates.
Moving from one country to the other often proves challenging. New
tax system is one of the major problems faced by the expatriates.
This study will help us to know the changes in the personal income tax
and what steps a person must take before leaving their home country as
well as what procedure one must follow before entering the host
country
The main objective of this study is to understand the tax rules and
regulation and applying the same for assessment of the expatriates.
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COMPANY OVERVIEW
PricewaterhouseCoopers Private Limited (traded as PwC) is a
multinational professional services network headquartered in London.
Provides largest professional services in the world.
Big four auditors along with Ernst and Young, KPMG and Deloitte.
It has its system of firms in 157 countries with more than 208,000
employees.
The structure of PwC is divided into three service line:
Advisory
Assurance
Tax
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SCOPE OF THE STUDY

Understand the tax law related to expatriates in India.
Learn to prepare application related to initial registration of expats with
immigration authorities and income tax authorities in India
Understand the procedure of filing the income tax return of the expatriate
in India.
Develop technical skills to assist employers in tax withholding compliance
of expatriates in India.
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What is tax?
Tax, in general, is the imposition of financial charges upon an individual
or a company by the Government of India or their respective state or
similar other functional equivalents in a state.
The computation and imposition of the varied taxes prevalent in the
country are carried on by the Ministry of Finances Department of
Revenue.
Two types of taxes
Direct tax
Indirect tax
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EXPATRIATES

Expatriate is a resident of a foreign country working in another nation.

In a broad sense, an expatriate is any person who may live in another
country which he/she is a citizen of.

Expatriates can be classified into the following two categories:

Inbound Assignee: The expatriate who comes to India from abroad

Outbound Assignee: The expatriate who goes abroad from India
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DETERMINING RESIDENTIAL STATUS

Stay > 182 days in the tax year

Yes No

Resident
Yes Stay > 60days in the tax year and
Stay > 365 days in the
No
preceding 4tax years
Non-Resident for 9 out
of 10 previous tax years
Yes

No
No
Stay in India < 729 days in
preceding 7 tax years Yes

No

Resident & Ordinarily Resident Resident but Not Ordinarily

(ROR) Non resident (NR)
Resident (NOR)
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HEADS OF INCOME
1. Salary
Remuneration earned / received for rendering services in India are
liable to tax in India as per Income Tax Act ,1961

2. Income from House Property

Income is chargeable under the head Income from House Property if the
assesses has house property in India and he is receiving income
from the same. In case the assesses has only one house property
which he is using for himself during the relevant FY then the same
will be treated as self occupied and will not liable to tax under the
house property provision provided.
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3. Income from profits and gains of business profession

Any income or gain arising from a business or profession carried out by the
assesses then the same would be taxable under section 28 of the Income tax
act after considering the exemption/deduction available from section 29 to
section 35 of the Income tax act 1961

4. Capital Gain
Any gain arising on transfer of any capital asset is liable to tax as capital gain
due to increment in value of the capital asset he holds .Further if the sales
considerate is utilized for specified assets the exemption is also available and
no taxes would be payable.

5. Income from other sources

Any income arising from the source which are not otherwise defined under
law would be liable to tax under the head Income from other sources.

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TAX SLAB RATES

Income slabs Tax rates

Taxable income upto INR 2,50,000 Nil

Taxable income between INR 2,50,000 10% of income exceeding INR 2,50,000
5,00,000

Taxable income between INR 5,00,000 20% of income exceeding INR 5,00,000
10,00,000

Taxable income above 10,00,000 30% of income exceeding INR10,00,000

Surcharge of 15% of the aggregate tax liability in case total income exceeds I.N.R
10 million.
Education cess is @ 3% of the income tax and of surcharge, if applicable.
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TAXATION PROCESS
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METHODOLOGY
METHOD ADOPTED
The data was collected from secondary sources.

DATA COLLECTION
Data was collected through my understanding from income tax laws
and rules that are provided under income tax 1961
Different training session conducted during my period of internship.
Data collected through various income tax websites and case laws from
taxman website.
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LIMITATIONS
As the project is based on the data recorded by the company, we
face the limitation of extracting that particular data because our
access is limited for the sake of confidential information of the
company.
Tax rates and new tax rules and regulations introduced time to
time.
Duration of the study was short.
Study was limited to the available information in the department.
Sometimes the complete information of the expatriates are not
provided by the clients
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SUGGESTIONS
ITR filling techniques should be improved in order to maintain
consistency.
Good knowledge about tax rules and regulations.
Brief presentation about IT return should be arranged for the employees.
Proper system should be implemented for tax computation.
The employees should file returns before the due date in order to give a
good impression to the clients and results in binding of the contract.
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THANK YOU!