Income Tax Appellate Tribunal Chennai: Taxability of Foreign Salary

Case Name:

Income Tax Officer, Ward-2(1), International Taxation, Chennai vs. Shri Mani Rajesh

Key Takeaways:

1. The appeal by the revenue concerns the taxability of foreign salary earned by the assessee during the assessment year 2019-20.
2. The assessee was a salaried employee with M/s. Master Card India Service Pvt Limited and was sent on a long-term international assignment to Singapore.
3. The Commissioner of Income Tax (Appeals) allowed the claim of the assessee, stating that the salary income accrued outside India and was taxable in Singapore only.
4. The Tribunal confirmed the adjudication of the Commissioner of Income Tax (Appeals) subject to verification by the Assessing Officer.
5. The Tribunal held that the salary income for work performed in a foreign jurisdiction would not be taxable in India, whereas the salary received for work performed in India would be taxable in India.

Case Synopsis:

The case involves the taxability of foreign salary earned by the assessee during the year. The order is pronounced by HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM.

The key points from the document are as follows:

The appeal by the revenue arises from the order of the Commissioner of Income Tax (Appeals) dated 17-11-2022, in the matter of an assessment framed by the Assessing Officer under section 143(3) (of Income Tax Act, 1961) on 27-09-2021.

The main issue is the taxability of foreign salary earned by the assessee during the year.

The assessee was a salaried employee with M/s. Master Card India Service Pvt Limited and was sent on a long-term international assignment to Singapore. The salary was paid by the Indian employer, and the assessee remained on the payroll of the Indian employer.

The Revenue contended that the salary should be taxable in India, while the assessee claimed that it should be taxable in Singapore under the Double Taxation Avoidance Agreement (DTAA) between India and Singapore.

The Commissioner of Income Tax (Appeals) allowed the claim of the assessee, stating that the salary income accrued outside India and was taxable in Singapore only.

The Tribunal referred to similar cases and held that the salary income for work performed in a foreign jurisdiction would not be taxable in India, whereas the salary received for work performed in India would be taxable in India.

FAQ:



Q1: What was the main issue in the case?

A1: The main issue was the taxability of foreign salary earned by the assessee during the assessment year 2019-20.

Q2: What was the decision of the Commissioner of Income Tax (Appeals)?

A2: The Commissioner of Income Tax (Appeals) allowed the claim of the assessee, stating that the salary income accrued outside India and was taxable in Singapore only.

Q3: What was the decision of the Tribunal?

A3: The Tribunal confirmed the adjudication of the Commissioner of Income Tax (Appeals) subject to verification by the Assessing Officer.