Dear sirs

My son is working for a foreign company in Dubai since April 2010. A month back he switched over to another foreign company and still works in Dubai. His salary is paid in dubai in his account there. The latter company proposes to open a subsidiary in India. If my son comes to India and joins the subsidiary when it is set up in India,
1. For the financial year 2011-12, what portion of his salary will attract Indian income tax? (since he stayed more than 7 months in Dubai)
2. If he continues to receive his salary in Dubai after coming to India till the subsidiary is set up and he receives salary in India after the set up, whether the taxable income portion will change

I shall be much obliged for your guidance.


Admin’s Response:

Answering your queries in order:

1. The taxability of 7 months salary would have to be decided largely on agreement between the subsidiary and the parent company at the time of formation of such company in India.

2. The salary received in Dubai after the employee comes to India will be taxable in India. Whether the subsidiary is set up in India before or after his coming to India will not change the situation.