How will my wage arrears be taxed in India?

I labored for an Australian agency in that nation from June 2012 to May 2022 and was thereafter transferred to its India workplace. The firm has now determined to pay me some wage arrears. Will this quantity be taxable in India?      —Name withheld on request

How your revenue will likely be taxed in India depends upon your residential standing, and whether or not such fee has been earned in India. Also, in some conditions, such revenue could also be taxable in India whether it is acquired in India. 

 Based on the knowledge given by you, it appears you’ve gotten been a  non-resident Indian (NRI) for revenue tax functions to this point.

However, since you’ve gotten returned to India in May 2022, you’re prone to be resident however not ordinarily resident in India for tax functions for FY 2022-23. Please notice that residential standing should be decided for each monetary 12 months. Since you’re resident however not ordinarily resident, the revenue which is earned and acquired outdoors India shall not be taxed in India. It could also be taxed regionally. Where these dues are acquired in India straight, you could have to see whether or not these are included in your Form 16 in India and in such a case you could have to pay tax in India on them. 

I’ve been residing within the UK for 5 years now and began investing in Indian shares this 12 months. Is there a restrict on dividend revenue for  (NRIs) and the way will the dividend be taxed?       —Name withheld on request

Effective 2020-21, dividend revenue earned from shares held in Indian home corporations are taxable within the fingers of shareholders. For resident shareholders, such dividend revenue is taxable at revenue tax slab charges relevant to them. However, in case the shareholder is non-resident in India, such dividend revenue shall be taxable at 20% (extra surcharge and cess as relevant). 

Note that the corporate paying dividend to you shall deduct TDS at 20% (together with surcharge and cess) or at a decrease price if obtainable as per DTAA. To apply a decrease price by advantage of the DTAA between the nation of your residence and India, you shall must submit a tax residence certificates of the nation the place you’re resident to the corporate making the TDS deduction. 

Archit Gupta is founder and chief govt officer, Clear.in.

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