Income Tax for income from IMF

[Joydev Dasher]

Hello. My friend (Indian resident) with incomes from other business / profession in india is also a part time contractual employee of IMF (an UN organisation). She gets called for some field works in different countries for 7-10 at a time ( no service in India) and on a couple of occasions during the year. She gets paid certain 'remuneration' at certain per-day rates in USD for the number of days the work is rendered, apart from the actual expenses for travel etc. to her bank a/c in India. I presume this is considered as income from exports of service.

It is mentioned to her that as an official of the IMF, the contractual-employee is entitled to the tax immunities pursuant to Article IX of the IMG's Articles of Agreement and, with respect to most member countries, the UN Convention on the Privileges and Immunities of the Specialized Agencies (hereinafter the Specialized Agencies Convention), Article VI, Section 19.2. Thus, the IMF's Fund remuneration is normally exempt from income tax. However, she has been told by her tax consultant in India that all her receipts will be subject to income tax and clubbed with other incomes in India (she is in highest tax bracket). Queries are:

(i) If her per-diem remuneration received on one or two occasions during a year will be subject to income tax in India and at what rates?

(ii) To explain this position to IMF, which provisions of the Income Tax Act / rules etc. can be relied upon or quoted?

Regards and thank you in anticipation.

AI Summary

IMF remuneration taxability for Indian resident contractor remains disputed over income inclusion, exemption claim, and applicable Indian tax treatment. Indian resident receiving per-diem contractual remuneration from the IMF for field work performed outside India raises the question whether such receipts are taxable in India or protected by IMF-related tax immunities. The issue also asks whether the remuneration must be clubbed with other Indian income, taxed at the applicable slab rates, and what provisions of the Income-tax Act, rules, or related legal materials may be relied on to explain the position.