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Say, I am an Indian citizen and living and working in US, do I still have to pay some taxes to Indian government? My first thought is why should I be paying taxes to Indian government because neither am I living in India nor am I employed in India and I am earning in USD. But then my second thought is that I may have to pay some (nominal) taxes to Indian government, because I am still holding Indian citizenship and hence at any point I can come back to India and start availing facilities in India?

Please give me some input to if I am liable to paying taxes to Indian government and in yes/no case, please also give some clue to philosophy behind.

Thanks,

  • I had been to USA for 2 Months under H1 visa and was paid there by my company in USD who deducted TDS according to US income tax law. How much Tax I have to pay on income earned in USA when transfered to India??? – user26240 Mar 7 '15 at 15:10
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You won't be paying any taxes for income generated in the US as long as you are not-resident in India. You pay US taxes. You can file a null return in India just in case (all zeroes). If you have any income in India - bank deposits in your name, house rental income and so on - that needs to be declared and tax needs to be paid in India.

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Your federal taxes in US include the tax which Indian government wants back from you under the treaty with US government. Some countries have treaty with US where all the money person earns in US can be reclaimed at the end of the financial year i.e no money goes to the country of citizenship. However, Indian citizens working in US are not liable for 100% reclaim on their federal tax.

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Under Income Tax Act, tax liability depends on residency as defined under section 6 of the Income Tax Act, and not on citizenship.

If you are resident in India, then your global income is taxable.

As it appears from your question, you are not resident of India (182 days stay in India in a FY), as such you will have absolutely no tax liability for whatever income you earn outside India.

  • 1
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protected by Community Mar 7 '15 at 16:21

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