Case AQ - Why NRI cannot be expected to fill the foreign source income schedule ?


By - Amlan Dutta 




Concept - We have to understand concept of scope of taxable income here For a NRI , the overseas income is not included in the scope of taxable income Say , for Assessment year 2015 16 i stay 2 months in India working for LNT and then travel overseas to USA for job for balance 10 months and my earlier other stats also combine to prove me a NRI


Now say , i earn 2 lakhs in India and 10 lakhs in USA Many people get confused as to whether rules have changed in AY 2015 16 and mandate the NRI(non residential India ) to fill up the foreign source income schedule .Many of you have whatsapped me , some of you call me and i have had a boring time explaining the same concept again and again and so this article


You see, as a NRI , this 10 lakhs is not taxable in india doesn't get added to my scipe of taxable income here ...i have paid taxes in america and the story ends there because my residential status certifies me as a NRI ...


Yes , True enough , If i had been a resident , yes in that case i would have included this 10 lakhs in salary head and reported combined salary income of 12 lakhs.Here i would then be required to report it in the FSI (foreign source income ) Clearly because the income gets added to me as a resident , i will be supposed to pay tax on it


But hey , hold on a second , i paid taxes in USA right....I am again needed to pay taxes here , so i also fill the TR schedule (tax relief schedule ) to claim benefit under suitable provision of DTAA (doublke tax avoidance because the 10 lakhs american income is subject to both american and indian tax , if i am resident )


But , fuck this part ....i am a NRI now ...if i am , i can no longer declare this in the scope of taxable indian income Now if i can't, how on earth can i show it in FSI (foreign source income ) because whatever you declare in FSI must be mandatorily declared in corresponding income headNote that FSI and TR schedule's are primarily to claim tax relief When you are not facing the double tax burden because of the american income not added because of the NRI status , where is the question of relief The 10 lakh american income is not subject to double tax i.e amercian and indian and subject to simply american tax !

When no double tax , where is the question of relief as per double tax avoidance ! So , if no relief , how on earth FSI sn TR schedules which are for claiming relief ....In short therefore any NRI can never ne expected to fill up the FSI and TR schedules ...if your accountant is asking you to , he/she is the biggest idiot but you please understand the subject concepts and don't fall into stupid thing's!

It is only resident who will face and is therefore requiredI could have gone into RNOR but forget that part because i wanted to nail the basics !I recollect calls from accountants where they dont even know how to apply relief ...i feel sad but anyways master and understand the concepts ..i understand that there is a shitty exam to pass but p[assing without understanding anything will lead you to positions where you will find your own fraternity not helping you when you need them !


Also , for purposes of this note please dont mix up FA and FSI (Foreign assets and foreign source income ) are different things !I have left tax domain , i don't wanna go back there ...


But some queries keep coming especially NRI taxation , relief under section 89 etc etc ..i will try and cover that unfinished part !

I am made to understand that accontants charge 15000 Rs for DTAA case and 6000 Rs for Relief under 89 ...i feel ashamed of such people !Anyways , goodbye!


Cheers !


P.s - Just because i called a stupid CA who missed to understand USA DTAA agreement - a idiot once , i was asked to take out my DTAA tutorial out which would have saved thousands of people lakhs of rupees!That tutorial was made at 1 am in the night , ended at 3 am and was uploaded by 4 am ..but i took it down because it risked someone's job- both the CA and the person who asked me for guidance!

But's okay ..i really don't have time for all this so much and i now wanna enter photography !But whenever i feel that some topics should enter common domain , i will time and again pass by which will eventually help everyone!