If an Indian resident earns any income in the USA is he liable for double taxation?

Question

I plan to work in the USA for 2-3 months then come back to India.

In this case is there tax liability both in the USA and India?

Answer 1

If you are paid per diem or living allowance, the expectation is that you spend it in the USA to comfortably live. Any savings you bring to India should be declared as income and tax needs to be paid.

If you are paid a salary in the USA, your USA income should be declared in India. Total India tax needs to be computed. Tax paid in the USA must be deducted. This is because you are "resident in India for tax purposes".

Answer 2

Taxability in India is based on residential criteria like if you are staying in india for a period of 182 days or more in a year If you fulfill this criteria you will be liable to contribute tax in India straight away and if your period of stay is 60 days in previous year and you stay 365 days or more in preceding 4 years then also you will come under this ambit of income tax

Important points to be kept in mind are 1. Residential status is always determined for the Previous Year because the assessee has to determine the total income of the Previous Year only. In other words, as the tax is on the income of a particular Previous Year, the enquiry and determination of the residence qualification must confine to the facts obtaining in that Previous Year. 2. If a person is resident in India in a Previous Year in respect of any source of income, he shall be deemed to be resident in India in the Previous Year relevant to the Assessment Year in respect of each of his other sources of Income. [Section 6(5)] 3. Relevant Previous Year means, the Previous Year for which residential status is to be determined 4. It is not necessary that the stay should be for a continuous period. 5. It is not necessary that the stay should be at one place in India. 6. Both the day of entry and the day of departure should be treated as the day of stay in India 7. Presence in territorial waters in India would also be regarded as stay in India.