Indian Company is always resident in India Foreign Company is resident in India

Indian company is always resident in india foreign

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Indian Company is always resident in India. Foreign Company is resident in India only if control and management of its affairs is situated wholly in India. Status of Income Income Received in India Income Arise in India Status YES YES Indian YES NO Indian NO YES Indian NO NO Foreign Indian Income is taxable for all. (Residents as well as Non-Residents) Foreign Income – 1. Taxable for Resident and Ordinarily Resident in India 2. Not Taxable for Non-Resident 3. Two types of Income – Business controlled wholly or partially in India and/or Professional Set up in India is taxable for individuals who are Resident but not Ordinarily Resident in India Fully Exempt Incomes – 1. Share income of member from HUF/ Partner’s share in the total income of the firm/LLP 2. Payment from Sukanya Samriddhi Account/ Scholarships granted to meet the cost of education 3. Compensation received from Govt on account of any disaster 4. Amount received under life insurance policy including policy bonus 5. Amount withdrawn from Provident fund by salaried employees 6. Any amount received by the individual as loan in lump-sum or in installments in transaction of reverse mortgage 7. Any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India, rendering service outside India 8. Agricultural Income 9. Daily Allowances of MPs & MLAs and Constituency Allowances of MLCs 10. Pension of Gallantary Awardee (Vir Chakras) & Family pension of member of armed forces 11. Income of Sikkimese Individual from any source in the State of Sikkim
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Rule regarding Agricultural Income There would be partial integration of agricultural income with non-agricultural income if 1. Non-Agricultural income exceeds exemption limit 2. Agricultural Income exceeds Rs 5,000 Steps in Partial Integration – 1. Add agricultural income with non-agricultural income and calculate tax on aggregate 2. Compute tax on exemption limit + agricultural income 3. Step 1 – Step 2 4. Amount under Step 3 is the tax amount to be payable after charging Cess Income from Salary Fully Taxable Allowances – 1. Dearness Allowance 2. City Compensation Allowance 3. Medical Allowance 4. Lunch Allowance 5. Overtime Allowance 6. Servant Allowance 7. Warden Allowance 8. Family Allowance 9. Non-Practicing Allowance Fully Exempt Allowances – (To the extent amount received or amount spent whichever is less) 1. Daily Allowance 2. Uniform Allowance 3. Helper Allowance 4. Academic Allowance 5. Conveyance Allowance 6. Cost of Travel on tour or on transfer of duty Special Cases - 1. Allowance received by employee of UNO 2. Sumptuary Allowances to High Court and Supreme Court Judges Partially Exempt Allowances – 1. House Rent Allowance – Exempt to the least of (i) Actually received (ii) Rent paid less 10% of salary (iii) 50% of salary if house is on rent in Delhi, Mumbai, Kolkata, Chennai. Otherwise – 40% of salary Salary - Basic + DA + Fixed % commission on Turnover If Employee is living in his own house or not paying any rent, nothing is exempt.
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2. Children Education Allowance – Exempt upto actual amount received per child or Rs 100 p.m.
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  • Indian Tax Rules

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