Taxability of income earned outside India- Individuals

If you are an Indian resident working overseas or having income outside India, then your global income will be taxable in India.  Income earned outside India shall also be taxed in India even though your foreign income is also taxable in that foreign country. To avoid the double taxation of such foreign income, the act provides the relief to the assessee. The central government enter into an agreement i.e. Double Taxation Avoidance Agreement (DTAA) with the government of other country or territory outside India to grant relief in respect of double taxability.

In case DTAA with foreign country exists

If DTAA agreement exists between India and that foreign country from which the assessee earned such foreign income, and then the total income of the assessee shall be taxed at the DTAA rate or the Income tax rate, whichever is beneficial to the assessee.

In case DTAA with foreign country does not exists

In such case, the assessee shall be entitled to the deduction of Indian income tax paid on total income including such foreign income or tax deducted or paid in foreign country in respect of income earned in that country, whichever is lower from the Indian income tax payable on total income including such foreign income.

In case of non-resident individual in India, income which accrue or arise or deemed to be accrues or arise in India during the previous year or income received or deemed to be received in India during the previous year shall be taxed in India as per the act. Foreign income earned in by a non resident shall not be taxed in India.

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Please join us now in pursuit of simplifying individual taxation!

Alok Patnia

Founder and Director at

2 thoughts on “Taxability of income earned outside India- Individuals”

  1. My son went to USA for MS Study after hihs BE Computer. from January 2011 to March 2012 which studying he earned his income as Graduate Assistant and kept in his bank account there. While doing return before 31.7.12 for A.Y. 12-13 how the income is to be reported in I.T.Return? is it exmpt income or is it to be reported under section 90/91? and if so what certificate is required from USA for the same. Pl.advise today if possible on my email, as I have to file online his return before 31.7.2012. Thanks. S.J.Gosavi.

  2. Dear Mr. S.J. Gosavi – The tax incidence would totally be depedent on the residential status. Having said that, in your case, we assume, he would non-resident for FY 2011-12, thus income from outside india would not be taxable in his hand.

    We can assist you in filing his tax returns in most hassle free manner- Please check this page for more –

    Alok Patnia
    Founder and CEO at
    call me at +919230033070 or mail us at –

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