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Nitin (n/a)     16 April 2008

US Consultant Hiring

Dear Members,

1) I have one small query, if we are hiring some one from US on a contract basis, how can we pay him a salary or consultancy fees in India. I am bother about Tax calculation and filing of return of his income in India or US.

2) There are some diffrent type of visa also which really make confuse for further processing. i.e. Business Visa, Tourist Visa, Employement Visa etc. That is really confusing, which visa is not allowing him to earn salary or consultancy fees in India.

How usually we pay salary or consultancy fees in these type of cases, Kinly guide me on the Taxation (In which they can save their Tax) and Visa procedure (which do not creat any problem to earn the money in India).

I will be really thankful to you.

Nitin Gupta







 3 Replies

Sumit Shingala (Chartered Accountant)     16 April 2008

The taxation levy would largely depend upon terms n conditions for and under which one is hiring a consultant from US.

However, from what transpires from your description, it seems that it is a contract of buying consultation services from us entity, In this case, at the time of making payment to the us entity the payer is casted by i.t. act, 1961 with a responsibility to deduct tax from the amount payable.

As far as filing of return of income is concerned, and taxation of other income is concerned, it is very important to many days in a financial year that person stays in indian territory including indian water and air territory.

After considering his stay, his status can be ascertained and thereafter his tax liability may be worked out...

Nitin (n/a)     17 April 2008

Thanks a Lot Sumit, But in this case, Tax calculation will be same as per Indian Income Tax norm or will differ for US resident working in India. Another point is about Visa, I have mentioned, if one is having Business Visa or Tourist Visa. Is there any boundation to earn salary in among of them.

Sumit Shingala (Chartered Accountant)     18 April 2008

As far as visa type is concerned, there is no impact thereof on Taxation in India. By whatever mode of visa or otherwise, any income in india is earned ; it is subject to indian taxation. Rates and computation method will be same as applicable to an ordinary indian citizen as far as salary income is concerned. But as i told you, things largely depends upon the total no. of days stay in indian teritory during a particular financial year and its preceding years.

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