income tax on entire salary is in line with current Indian income tax laws which provide that an expatriate’s entire salary is taxable in India in as much as it relates to services rendered in India.
The notification also indicates that in case of a foreign national being in
employment with an Indian company, the entire salary received by him in India in INR can be remitted to a foreign currency bank account outside India, provided Indian income tax is paid on entire salary in India.
The above liberalization would benefit the expatriates by insulating them from foreign exchange rate fluctuations as also assist expatriates to continue to make social security contributions in their home country. Employers and expatriates should now review their employment arrangement to take benefit of the above change. |