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India - Overview and introduction

India - Overview and introduction

Taxation of international executives


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Taxation varies based on the residential status of the individual in a tax year. Individuals can be classified as resident and ordinarily resident, not ordinarily resident, or non-resident in a particular tax year.

Residents and ordinarily residents are taxed on worldwide income and are required to report their global assets in the India tax returns. Non-residents and not ordinarily residents are taxed only on income received, accrued, or deemed to accrue or be received in India. Not Ordinarily residents are also taxed on income derived from a business controlled or a profession set up in India. Consequently, their income accruing outside India or received outside India is not taxable in India, unless the same is received directly in India. Salary for services rendered in India is deemed to accrue in India and hence, taxable in India for all individuals, irrespective of the place of payment, subject to benefits available under the Indian domestic tax law or the double taxation avoidance agreement India has entered with respective countries/jurisdictions. The leave period before or after services rendered in India and which forms part of the employment contract is deemed to have been earned for services rendered in India.

The official Indian currency is the Indian National rupee (INR).

Herein, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.


All information contained in this publication is summarized by KPMG (Registered), the Indian member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on:

  • the Income-tax Act, 1961, (‘the Act’) as amended; 
  • the Income-tax Rules, 1962 (‘the Rules’) as amended;
  • the Employees Provident Fund and Miscellaneous Provisions Act, 1952 as amended (‘the PF Act’);
  • the Employees’ Provident Funds Scheme, 1952 (“the PF Scheme”) as amended;
  • the Employees’ Pension Scheme, 1995 (“the Pension Scheme”) as amended;
  • the Employees’ Deposit Linked Insurance Scheme, 1976 (“the EDLIS”) as amended;
  • the Employees’ Pension (Third Amendment) Scheme, 2008; 
  • the Employees’ Provident Fund (Third Amendment) Scheme, 2008;
  • the rules and regulations there under the above laws and various other laws and regulations

as amended from time to time, including judicial and administrative interpretations thereof, which are subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions. Any such change, which could also be retroactive, could have an effect on the validity of our comments. Our views are not binding on any authority or court, and so, no assurance is given that a position contrary to that expressed herein will not be asserted by any authority and ultimately sustained by an appellate authority or a court of law.

© 2021 KPMG Assurance and Consulting Services LLP, an Indian Limited Liability Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG (Registered) (a partnership firm with Registration No. BA- 62445) converted into KPMG Assurance and Consulting Services LLP (a Limited Liability partnership firm) with LLP Registration No. AAT-0367 with effect from July 23, 2020.

For more detail about the structure of the KPMG global organization please visit

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