Will my overseas earnings be taxed in India?

I’m working from India for a UAE-based employer who transfers my wage each month to my Indian financial savings checking account.

Am I liable to pay tax on this earnings on the finish of economic 12 months 2021-22?

—Shikher

As you’ve got talked about that you’re working from India, it’s assumed that you’re/might be bodily current in India for greater than 181 days throughout the Indian monetary 12 months (FY) 2021-22 and qualify as a resident and strange resident (ROR) in India for the mentioned FY, as per the situations prescribed underneath the Indian tax legal guidelines.

Accordingly, as a resident and strange resident in India, you’ll be taxable in India in your world earnings, which would come with the wage obtained by you in India from the UAE-based employer. Based on the restricted details out there, it appears unlikely that you’d be eligible for any advantages underneath the Double Tax Avoidance Agreement (the Treaty), topic to precise examination.

Considering the above, you’ll probably be liable to pay tax in India on the wage obtained by you from the UAE-based employer at your relevant tax slab charges, web of any Indian taxes that will have been withheld at supply by your employer.

Also, in case no/insufficient taxes have been withheld at supply, you’re required to discharge the Indian tax legal responsibility by way of the prescribed advance tax instalments throughout the FY itself (if relevant), in absence of which extra curiosity, as prescribed, could be payable together with the taxes due on the time of submitting the Indian tax return.

I’ve been investing in shares, which have considerably appreciated. In case I promote them, the revenue might be topic to long-term capital features.

If I make investments the quantity realized to purchase land or a home, can I modify it in opposition to the long-term capital achieve?

—Randhir Patel

In relation to the long-term capital features (LTCG) arising from the switch of shares, a roll-over exemption might be claimed underneath Section 54F of the Income Tax Act, 1961, in direction of funding of web sale consideration in buy or development of 1 residential home in India, topic to all of the prescribed situations and timelines. It could also be famous that mere buy of a plot of land with out development of a home on the identical wouldn’t entitle you for the mentioned exemption.

A couple of key situations being that the home ought to have been bought inside a interval of 1 12 months earlier than or two years after the date of sale of shares or constructed inside a interval of three years after the date of sale of shares.

Also, you shouldn’t personal multiple residential home, aside from the proposed new home on the date of sale.

If the price of the brand new home equals to or exceeds the online consideration on sale of shares, the entire of such LTCG might be claimed exempt from tax. Else, the exemption could be restricted to the identical proportion as the price of the brand new home bears to the online consideration on sale of shares.

Parizad Sirwalla is accomplice and head, world mobility companies, tax, KPMG India.

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