The Income Tax Appellate Tribunal ( ITAT ), Delhi bench has held that the no income tax can be levied on the salary earned by an Indian employee who resided out of India for 182 or more days and the said salary had been subjected to TDS.
In the instant case, the assessee earned salary from his foreign employer (Korea). The amount was received outside India and has not declared in the return of income and also not claimed any relief under Section 90 of the Income Tax Act.
The Assessing Officer made an addition on the basis of the Form 26AS and held that the salary income of Rs.17,09,702/- earned in Korea is subject to income tax in India in the impugned assessment year. According to him, tax has been deducted by the employer from such salary income and assessee has not disclosed the same in his salary income.
Under the Income Tax laws, if an individual has spent less than 182 days in India during a previous year and was outside India for the purposes of employment, then regardless of his being in India for 365 days or more during 4 preceding previous years, he cannot be treated as a resident of India.
The assessee submitted that since he was outside India for more than 182 day, he became a non-resident and not liable to tax on the salary income.
The Tribunal accepted the above argument of the assessee and held that the income is not taxable as the assessee in the instant case has stayed outside India for more than 182 days,
“It has been held in various decisions that when a citizen of India leaves India for employment abroad and stayed outside India for 182 days or more, then he becomes a non-resident and the income received from services rendered outside India cannot accrue or arise or deemed to accrue or arise in India and cannot be taxed in India notwithstanding the fact that the same is credited in the bank in India or TDS has been deducted on such income,” the bench said.
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