Income Tax TDS on Salary of Non Resident I Income Tax Act of India

By | March 17, 2022
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(Last Updated On: March 17, 2022)

Income Tax TDS on Salary of Non Resident

(Contact us on taxheal@gmail.com) . Income Tax TDS on Salary of Non residents paid in India

Following is calrification as per Salary TDS for FY 2021-22 (AY 2022-23 ) CBDT issued CIRCULAR NO 04/2022

Matters pertaining to the TDS made in case of Non-Resident

4.15.1 Under section 192 of the Act. any person responsible for paying any Income chargeable under the head Salaries, sha ll at the time of paymen t. ded uct income tax on the amount payab le. This section doe s not distingu ish betwe en the sa lary paid to a resident or a non resident. Hence all payments taxa ble under the head Salaries are liable for deduction of TDS irrespective of the residential status of the recipient.

4.15.2 In respect of non-residents, the sa lary paid for services rendered in India shall be regarded as income earned in India. It has been specifically provided in the ex planation to section 9(1)(ii) ofthe Ac t that any sa lary payable for rest period or leave pe riod which is both preceded or succeeded by service in India and forms part o f the service contract of employ ment will a lso be regarded as income earned in India

4.15.3 Where Non-Residents are deputed to work in India and taxe s arc borne by the employer, if any refund becomes due to the employee after he/she has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it [Circular No. 707 dated 11.07.1995].

CIRCULAR NO.707, DATED 11-7-1995
1. References have been received by the Board in cases where non-residents are deputed to work in India and the taxes are borne by the employers. In certain cases, an employee to whom refunds are due has already left India and has no bank account here by the time the assessment orders are passed. A question has been raised whether in such cases, the refund can be issued to the employer as the tax has been borne by it.
2. The Board has considered the matter and it is of the view that insofar as the payment of refund which has already become due in concerned, there may be no objection to giving the refund to the employer if the non-resident assessee duly gives an authorisation in this regard. In such cases, the procedure laid down in Circular No. 285, dated 21-10-1980 issued by the Central Board of Direct Taxes needs to be followed.
3. Under the provisions of section 163 of the Income-tax Act, 1961, inter alia, any person from or through whom the non-resident is in receipt of any income, whether directly or indirectly, can be regarded as an agent in relation to the non-resident. Accordingly, the company itself can file the return and can be assessed in its own name in respect of that income under section 161(1) of the Act, and claim the refund.

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