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I got a job in Kuwait and I joined on 03-09-2014. Earlier I was working in India and was paying my Income Tax regularly.

Now I am sending Kuwaiti Dinars sometimes to my and sometimes to my wife's ordinary savings bank accounts in India.

Will I have to:

  1. Show my Kuwaiti Income in my Income Tax Return?
  2. Pay any tax on the money that I am sending to savings bank accounts in India
  3. Will my wife have to show the income and/or pay the income tax on the money that I am sending to her savings bank accounts?
  4. If answer to (2) or (3) above is yes, then how can I save on my Income Tax?
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For the financial year 1 April 2014 to 31 March 2015, as you have [or will be] spent more than 182 days outside India, you would be treated as "Non-Resident" [NRI] for tax purposes.

If you are NRI

Show my Kuwaiti Income in my Income Tax Return?
Pay any tax on the money that I am sending to savings bank accounts in India

You need not Pay Tax on your income outside India. i.e. there is no tax obligation created. It cannot be declared in Tax Returns. However any interest you earn on the money deposited in India would be subject to taxes.

Will my wife have to show the income and/or pay the income tax on the money that I am sending to her savings bank accounts?

There is no Income to you wife [Income is something you earn] and hence its out of scope from Income Tax act. It would fall under gift tax rules. As per Gift Tax one can transfer unlimited funds between close relatives. Hence there is No tax.

It would be better if you open an NRO/NRE account and transfer funds into that account

  • Thanks Dheer. But then what are the benefits of NRE/NRO account? – Yogesh Kumar Mandaan Feb 4 '15 at 15:09
  • Less Paperwork to establish that funds are not earned in India. An NRO/NRE account means only outside funds from outside India can be credited. – Dheer Feb 4 '15 at 15:49

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