Tax Implication on Income earned by RNOR

[PRIYAM KHAMBHATA]

Dear Sir

My client is Citizen of USA, he came back in India in June 2024, His Residential status is becoming Resident But Not Ordinary Resident. He has employed in Indian Company and earned Rs.1.0 Cr. for the year FY 2025-26. He is also earned Salary in USD 10000 from a Unit of Indian Company in USA. This USD is credited in US Bank Account. Such Unit of Indian Co. at USA is deducted federal tax on USD salary income.

My question is that would he include Salary Income in USD 10000 in his total income for taxation in India and claim of Foreign Tax credit (FTC).

Please advice.

Thanks

AI Summary

Resident but Not Ordinarily Resident foreign salary taxability turns on business controlled in India and Foreign Tax Credit availability.
For a Resident but Not Ordinarily Resident individual, foreign salary is included in total income only if it is received in India, accrues in India, or is derived from a business controlled in India or a profession set up in India. Salary earned in the USA and credited to a foreign bank account is prima facie foreign-source income, but its taxability depends on whether the US unit is an extension of the Indian company or an independent establishment. Foreign Tax Credit is available only if the income is taxable in India.