Q.875 Tax for OCI holders working

for NGO’s in India . . .

Question: Good day, My husband is a Canadian citizen holding OCI status for India. He works for an NGO which is offering to move him to head their operations in New Delhi, India. The company's policy is that employees are exempted from taxable incomes however, my husband wants to make sure if he chooses to move and work from India than is he liable to pay taxes because he holds an OCI or is still exempted? Any clarity on this matter will be highly appreciated. Regards, Melanie [April 28, 2016] Answer: OCI generally is just a visa (with some additional benefits) that allows foreign nationals to visit India without the need to acquire visas every time they travel to India. Having OCI should not effect an individuals tax liability in India. The NGO’s registration status in India, source of funds, the type/position of work, the period of stay etc are factors that can effect tax liabilities in foreign countries. The best source to determine tax liability of a foreign national working abroad, is to check the tax agreements signed between the concerned countries. Provided below is an excerpt from the Canada/India DTAA agreement generally: Remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the relevant fiscal year; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and (c) The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. To get a better understanding, read more about the Canada/India Double Tax Avoidance Agreement on this website CLICK HERE