Income tax implications for Indian consultants with overseas earnings— Explained

I worked for more than 182 (from April to October 2024) days in Oman, so the income earned in Oman will not be taxable in India. Now I am working as a consultant in India from Nov 2024. Will the income earned in India in Indian rupees be taxable, although I have worked more than 183 days in Oman last year? Which income tax form would I have to fill out while filing my income tax return? If I take my PF money out at present from my old company, where I worked for three years, will I get it as non-taxable (as I have completed more than 183 days outside), or will it be taxable, and how can I make it non-taxable?

Since you have not been in India for 182 days or more, you are non-resident for the purpose of income tax for the current financial year, so your Oman Income will not be taxable in India but your consultancy income in India will be taxable in India because income from Indian sources is taxable for resident as well as non-resident taxpayers.

Choose ITR 3 for consultant profits or ITR 4 for income below ₹50 lakh with presumptive tax

The form to be filed by you depends on the composition of your income. Since you are working as a consultant, which shall become taxable under the head “Profits and Gains of business or Profession” , you will have to file ITR 3. If you qualify for presumptive tax and your taxable income does not exceed 50 lakhs during the year, you can use ITR 4.

The money in your EPF account will be taxable as the contributions in your EPF account were for less than 5 years. As the contributions were for less than five years and you want to save tax on the Provident fund balance, the best course of action for you is to get this balance transferred to the EPF account of your employer as and when you take up a regular employment in India.

If you do not wish to take up full-time employment in India, the accumulated balance in your provident Fund account shall become taxable as and when you withdraw it. It is the period for which contributions have been made to the provident fund account and not the period for which the provident fund account is maintained. It determines the taxability of the balance in the provident fund account at the time of withdrawal.

The interest earned by you during the period no contributions were made will also become taxable in your hands even if you transfer the present balance to another employer.

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Balwant Jain is a tax and investment expert and can be reached on jainbalwant@gmail.com and @jainbalwant his X handle.

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