Taxable Income of RNOR

[Reshma kochar]

Dear Experts,

Facts of the case:

A person is rendering services to an Indian Group co, and receiving salary from India and foreign head office. also he is visiting other countries as well. His status is of RNOR. Does the salary income from foreign co taxable in India?

My understanding:

Reference to Section 5(1) Income which is accues or arise to RNOR outside india shall not be including in his total income if it is not derived from a business controlled in or a profession set up in india.

Reading section 9(1)(ii) income falls under the head salary will be accrues or arises in India, if it is earned in India. and explanation (a) says it will be earned in india if the services are rendered in india.

concerning both the sections, under section 9(1)(ii)a salary  income of RNOR from the foreign company only for the period of stay in india will be accrue and arise in india as services are rendered in india.  

Please correct my views, if they are not in line.

Also please clarify the meaning of word "derived" in section 5(1)

Regards,

Reshma

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Taxation of RNOR salary: foreign employer pay taxable for periods services rendered in India under residency rules.
Salary paid by a foreign employer to a Resident but Not Ordinarily Resident is taxable in India to the extent it is earned for services rendered while physically present in India; income accruing or arising outside India is excluded only if not derived from a business controlled in India or a profession set up in India.