Connect with us 
Are you an expat, working or planning to work in India, or perhaps an organization looking for tax compliance for its expat employees in India? Individuals and enterprises need to understand Indian law regarding expatriates for smooth tax compliance, transition, and hassle-free experiences.
Understanding Expatriates: Work Abroad and Benefits Explained
An expatriate is a person who resides in a country other than the country in which they hold citizenship, typically for temporary employment-related purposes. This transfer may occur either independently or as part of a work-related assignment facilitated by an employer, which may include an institution such as a university, corporation, non-governmental organization, or governmental entity.
Expatriates are people who work in a different country for a short time, usually 1-6 months, or a longer time, like six months to 5 years, and then return to their home country after their assignments are over. The visiting country is also referred to as a host country.
Expats on long-term assignments are generally qualified for various benefits in the form of perquisites provided by the company, along with a tax burden in the host country. These compliances are meant to ensure that the workers’ standard of living in their new country is equal to that of their native country.
Taxability of Salary Income for Expatriate Employees in India
Irrespective of residential status, income is deemed to be taxable in India when it is earned as a salary for services rendered in India by expatriate personnel. Along with it, it is mandatory to pay tax deducted at Source (TDS) regardless of the source of revenue.
Our Services for Expatriates in India
We provide customized service solutions for expatriates and their employers, ensuring smooth stays and easy tax compliance matters in India.
Expatriate Tax Consultation
Expatriates working in India are subject to various tax compliances and filings. We offer entry and exit tax consultations, including the assessment of the individual's residential status.
Tax Planning
Our tax professionals offer comprehensive tax planning services tailored explicitly for income from multiple countries. Leveraging our deep expertise in Double Taxation Avoidance Agreements (DTAA), we ensure that both expats and companies can minimize double taxation and optimize their tax efficiency. We navigate the complexities of international tax treaties to reduce your tax liabilities while ensuring full compliance with all regulations.
Obtaining Permanent Account Number (PAN)
Expatriates must get a Permanent Account Number (PAN) issued by the Income Tax authorities in order to comply with the income tax filing requirements. We facilitate the acquisition of PAN numbers for expatriates in India.
Foreign Regional Registration Offices (FRRO) Registration Requirement
Foreign nationals entering India on a long-term visa that lasts more than 180 days are required to complete their FRRO registration within 14 days of their arrival. This requirement extends to family members aged 16 and above accompanying the expatriate. We ensure efficient FRRO registration and offer comprehensive support for cancellation on your return to your home country.
Shadow Payroll Compliance
Employers need to ensure that they comply with formalities such as income tax, withholding, and social security regulations. We help to provide shadow payroll compliance for expatriates to align with local laws.
Withholding Tax (TDS) and Social Security Compliance (TDS)
The employer ensures certain compliance for expatriates who work with them, including social security and withholding tax compliance while paying expatriates. We assist the employer with comprehensive and custom solutions as per their requirements.
Income Tax Return Filing
Expatriates must file a tax return in India disclosing income earned and taxes paid in India. We assist in filing tax returns for expatriates before due dates and support in disclosing overseas assets and liabilities.
Income Tax Clearance Certificate (ITCC)/No Objection Certificate (NOC)
Expatriates must get a tax clearance certificate if their stay in India exceeds 120 days to affirm the absence of outstanding tax liabilities. It is required in case they depart after the completion of their assignment. We can help expats obtain the certificate with the following support.
- Contacting the local Income Tax Office
- Documentation requirements for NOC
- Payment of dues and verification process
- Hassle-free process for obtaining necessary clearances
Expat Taxes, Made Simple.
Managing global mobility is complex. We streamline expat tax compliance for employees and employers, so everyone stays protected.
Get Expat Tax Assistance Now
Mercurius: Your Expert Partner for Expat Tax in India
Navigating expat tax in India may seem complex, but with Mercurius by your side, you’ll have expert guidance through every step of the process, whether you’re on a short-term or long-term assignment in India.
Expertise
Mercurius's tax consultants are experienced tax professionals who are well-versed in the latest tax laws and regulations. Clients can depend on us for accurate, precise, and up-to-date advice to ensure compliance and optimize their taxes.
Personalized Service
We understand that every individual’s financial requirements are unique. Our services are tailored to match your specific needs and objectives.
Proactive Approach
With tax consulting services at Mercurius, you stay a step ahead of changes in tax legislation, and we proactively advise you on how to manage your tax affairs.
Comprehensive Support
We provide a full range of personal tax services, such as filing tax returns, preparation for tax planning, and dispute resolution.
Client-Centric Focus
Your satisfaction is our priority. We are committed to providing exceptional service and building long-term relationships with our clients.
Additional Support
- Contacting the local Income Tax Office
- Documentation requirements for NOC
- Payment of dues and verification process
- Our expertise ensures a hassle-free process for obtaining necessary clearances.
Mercurius: Your Expert Partner for Expat Tax in India
Navigating expat tax in India can feel overwhelming, but it doesn’t have to be. Mercurius specializes in guiding you through the complexities of tax and regulatory matters for short-term or long-term work assignments in India. Our services include analyzing social tax consequences, determining tax residency status, exploring expat concessions, fulfilling return filing obligations, and more.
Contact us today to simplify your expat tax journey in India.
FAQs
An expatriate refers to an individual who resides in a country other than their home country on a temporary basis for work or any other type of assignment. For example, a few MNCs employ employees from their mother country's organization, who are then transferred to the MNC's subsidiary in another country for short-term assignments, typically for job-related reasons.
The eligibility criteria for an expat employee in India are that he/she generally need an employment visa, which requires a minimum annual salary of USD 25,000 (approximately Rs 1.625 million).
There are two kinds of expatriates:
- Inbound Expatriate: a citizen of a foreign country who lives and works in India.
- Outbound Expatriate: a person of Indian origin who lives and works in a foreign country.
Yes, income earned by an expatriate for services rendered in India is taxable in India, regardless of residential status. Such income is subject to Tax Deducted at Source (TDS) by the employer or payer, as per the applicable TDS rates under Indian tax laws.
TDS applies to salary, professional fees, and other taxable payments made in India. The deducted amount is adjusted against the total tax liability when you file your Income Tax Return (ITR).
The taxability of an expatriate's income in India depends on their residential status under the Indian Income Tax Act:
- If the expat qualifies as a Resident, their global income (earned in India and abroad) is taxable in India.
- If the expat is a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR), only the following income is taxable:
- Income received or deemed to be received in India
- Income that accrues or arises (or is deemed to arise) in India
DTAAs (Double Taxation Avoidance Agreements) are treaties that India signs with other countries to prevent the same income from being taxed twice—once in the home country and again in India.
For expatriates, NRIs, PIOs, and OCIs, DTAAs offer key benefits such as:
- Relief from double taxation on salary, capital gains, or investment income
- Tax credits or exemptions for taxes already paid in the foreign country
- Reduced rates of TDS (Tax Deducted at Source) on income earned in India
- Lower compliance burden and improved cash flow
Yes, expatriate employees can claim relief under the Double Taxation Avoidance Agreement (DTAA) for taxes paid in another country. This applies when the same income is taxable both in India and the foreign country.
The credit or deduction is available through the Foreign Tax Credit (FTC) mechanism by filing Form 67 along with the Income Tax Return in India. The relief is subject to conditions under the applicable DTAA or Section 91 of the Income Tax Act.
If you’ve paid taxes in a foreign country, you can claim the Foreign Tax Credit (FTC) in India while filing your Income Tax Return.
To do this, you must:
- Submit Form 67 online through the Income Tax Department
- Provide details of the foreign income, the amount of tax paid abroad, and the country where it was paid
- Ensure that the credit is claimed in the same financial year in which the income is offered to tax in India
We provide comprehensive tax and compliance support for expatriates residing and working in India. Our specialized services include:
- Expatriate tax consultation – Personalized advisory on India’s tax implications for foreign nationals
- Obtaining the PAN
- FRRO registration support
- Tax planning for expats
- Withholding Tax (TDS) and social security compliance
- Income Tax Return (ITR) filing
- Income Tax Clearance Certificate / No Objection Certificate (NOC)
FRRO stands for Foreigners Regional Registration Office, the Indian government authority responsible for managing the stay, movement, and documentation of foreign nationals in India.
All foreign nationals staying in India on long-term visas (typically more than 180 days) are required to register with the FRRO.
- Visa registration and extension
- Visa conversion
- Exit permits
- Address change updates and more
