Tax saving

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Member since 29 May 2019

Phani19Member10 July 2019 07:45:34

Hi,

I’m writing this for one of my friend who got a contractual job for 1 year in saudi with business visa,from a Indian company, he is being paid in India rupees, 30 % tax is being deducted as his salary getting credited in Indian rupees

In anyways tax can be saved any options, other than requesting company to pay in riyals

Appreciate if anyone can provide suggestions

Thanks in advance

XTang Bahrain/UAE/Saudi Arabia Expert

Member since 22 April 2014

XTangBahrain/UAE/Saudi Arabia Expert10 July 2019 08:31:22

11826

I can't comment on Indian tax rules but as they are derived from the British system; taxation is dependent on residency not currency of transfer.

If he is tax resident in India then he has to pay tax on all income earned outside of India irrespective of the currency of transfer. Even if he opens an account abroad and credits salary there, he is still liable for tax.

The only way around this is to get residency in Saudi through a proper work visa. Then he won't have to pay tax in India as he won't be resident there (legally he will be a resident of Saudi and since he is already out of India for most of the time, he can prove it) and can open bank account in Saudi.

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