Important New Ruling on Expatriate Taxation in India
December 20th, 2007 - by Chris Devonshire-EllisBy Chris Devonshire-Ellis
Our partner firm in Mumbai, Rahul Guatam Divan & Associates, has just alerted us to an improved decision in India that provides a more attractive platform for expatriates working in the country.
A Special Bench of the Income Tax Appellate Tribunal has held that taxes paid by an employer, on behalf of an employee, can be added only once in the taxable salary of an employee and thereafter, tax on such a perquisite does not need to be added again, since it is considered a non-monetary perquisite. The decision can be found here.
This new development goes against a recent decision of the Delhi Bench of the Tribunal.
Hence, for all of the expatriate clients working in India, this will have the impact of reducing their tax liability. Consequently in light of this new development, they will need to rework the tax liability for all of these expatriates to ascertain the remainder of the tax owed to the Indian Revenue Authorities.
If you require assistance with this matter please contact india@dezshira.com.
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