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Working in India

Introduction India is the world’s largest democracy, with a population of more than 1 billion. From the Himalayas in the north to the Indian Ocean in the south and the Arabian Sea in the west to the Bay of Bengal in the east, the country is spread over 3.29 million square kilometers. The country’s enduring institutions are rooted in the principles of democracy and justice. It is a union of 28 federal states and 7 centrally administered union territories. The government is parliamentary, based on the universal adult franchise. Similar to the British model, there are two houses — an upper house, the Rajya Sabha, and the lower one, the Lok Sabha.

several 100 languages are spoken, and 22 of these

more diverse traditions. The country represents different faiths and has to its merit the historical genesis of varied belief systems worldwide, including Hinduism, Buddhism, Jainism and Sikhism.

(Source : http://www.facts-about-india.com/)

4 | Working in India

1 Income tax Act,1961

An individual’s Indian income tax liability is linked to his or her residential status. The concept of residential status is dynamic and, therefore, needs fresh determination every year. The number of days for which an expatriate is physically present in India

year extends from 1 April to 31 March) as

or her residential status in India for the year under consideration.

Under the rules of residence, an individual could either qualify as a resident or a non-resident (NR).

According to the tax laws, an individual is considered to be a tax resident if he or she is present in India for:

�

�and 365 days or more during the

may be extended to 182 days in certain cases.

These requirements are termed as the basic conditions of residency. If none of the conditions mentioned above are

an NR.

two kinds of tax residents:

�(RNOR)

�

of the following additional conditions will

�for at least 9 out of the preceding 10

�729 days or less during the preceding

If an individual does not satisfy both of these additional conditions, he/she is

Residency in India1

1 Income tax Act,1961

5Working in India |

The incidence of tax depends on the residential status of an individual.

An ROR is taxable on his/her worldwide income in India. Conversely, an RNOR is usually taxable, and an NR is taxable only on the following incomes:

�India

�India

Typically, an expatriate who is assigned in

his/her stay in the country.

Residential status vis-à-vis the tax incidence

The salary for services rendered in India is deemed to be India-sourced income and, therefore, is taxable, irrespective of the place of receipt and the expatriate’s residential status. Nevertheless, a safe harbor may be available under the Indian domestic tax laws (the 90-day rule) or the DTAA between India and the home country. There are prescribed conditions

cases.

In summation, the following incomes are subject to tax in India:

Residential status Income received or deemed to be received in India

Income accruing/arising in India or deemed to accrue/arise in India

Income accruing or arising outside India

NR � �

RNOR � �

ROR � � �

The income for services rendered in India is liable to tax in the country irrespective of the place of receipt or residential status. Safe harbors are available under the domestic tax laws and the Double Taxation Avoidance Agreement (DTAA) between India and the home country, and these need to be evaluated on a case-to-case basis.


Tax treatment of employee compensationCompensation includes salary, fees,

in addition to salary, advance salary,

Description Tax on full amount Taxed on a prescribed/concessional value

Base salary �

Bonus or commission/incentive �

Housing allowance �

Rent free accommodation �

Furniture provided by employer �

Temporary accommodation on transfer �

Utilities (electricity and water, servants) �

Children’s education

Tax borne by the employeri

�

driver)�

expensesii

�

�

Home leave travel ��

Stock incentivesiii

��

Home country social security contributioniv

(Subject to the

conditions)

Any allowance other than those

allowance, hardship allowance��

Broadly, the taxability of the typical components of an expatriate compensation package is as follows:

7Working in India |

Stock incentive schemes

The rules governing the taxation of stock-based income are summarized below.

�

sweat equity shares by an employer (including former employer) to employees will be taxable in the hands of employees as employment income.

�tax at the time of allotment of securities to employees.

�difference between the fair market value (FMV) of securities on the date of exercise and the amount recovered from the employee.

�stock exchange in India (will include shares that may be listed on any

overseas stock exchange), the FMV

1 merchant banker in India. For a company listed on a recognized stock exchange in India, the FMV will be linked to the market price of the shares.

The sale of shares, acquired pursuant to the stock option scheme of the company, is subject to a capital gains tax in the hands of employees. The taxable amount is the difference between the sale price and the FMV of the shares at the time of the exercise. There are certain exemptions and/or concessional tax rates available on the sale of shares listed on a recognized stock exchange in India, depending on the period of holding.

whether the employer is an Indian vis-à-vis a foreign entity.

incurred in the performance of duties.

iii. There are rules prescribed for the taxation of stock incentives and have been described in a separate section of this document.

basis.

A two-step taxation procedure is applicable to stock-based income: once at the time of allotment of shares, as compensation income, and secondly at the time of sale, as capital gains. Certain exemptions and/or concessional tax rates are available on the sale of shares listed on a recognized stock exchange in India, depending on the period of holding.


Income tax rates and tax compliance requirementsIndia’s model is similar to that of the UK’s

is responsible for deducting taxes at source from salary payments made to employees (at the income tax rate applicable to each individual).

Taxes are required to be deposited with the revenue within seven days from the last day of the month in which such payments are made. However, for

payments made in March, taxes are required to be deposited by April 30,

failure on the employer’s part to do this

and interest. While interest is mandatory, penalties are levied at the discretion of the Indian revenue.

individuals are set out on the next page.

For every individual (other than those mentioned below) (below 60 years)

Income range Tax percentage

Up to INR200,000 No tax/exempt

INR200,001 to INR5,00,000 10% of the amount exceeding INR200,000

INR5,00,001 to INR10,00,000 INR30,000 + 20% of the amount exceeding INR500,000

Above INR10,00,000 INR130,000+30% of the amount exceeding INR1,000,000

For resident senior citizens aged 60 years or more but less than 80 years


Up to INR2,50,000 No tax/exempt

INR2,50,001 to INR5,00,000 10% of the amount exceeding INR250,000

INR5,00,001 to INR10,00,000 INR25,000+ 20% of the amount exceeding INR500,000


For resident senior citizens aged 80 years or more


Up to INR5,00,000 No tax/exempt

INR5,00,001 to INR10,00,000 20% of the amount exceeding INR500,000


9Working in India |

Further relief of INR 2,000: Individuals with total taxable income up to INR 500,000 are allowed a tax rebate equal to the total amount of tax payable or INR 2,000, whichever is less.

A surcharge of 10% is levied on income tax in the case of individuals whose total income exceeds INR 10,000,000. This

An education cess of 3% is levied on income tax plus surcharge (as applicable).

The tax laws offer relief to individuals in the form of certain deductions from their gross total income. These include investment in certain tax-saving instruments

i and savings bank interest

ii.

a personal return of income within four

Also, taxpayers whose taxable income exceeds INR 500,000 are mandatorily

31 July 2014. There is no system of

attract interest and possible penalties.

in India who have assets (including

entity) located outside India or a signing authority on any account located outside India or who are trustees of foreign trusts

iii

return electronically in India (irrespective of their level of income). This provision will even apply to individuals accompanying expatriates to India, as it is unrelated to whether the individual has taxable income in India. The income tax return forms also require information relating to such assets (along with other disclosures) to be set out in the forms.

An individual is required to quote his/her Permanent Account Number (PAN),

in all of the correspondences with the Income Tax Department. All individuals

return are required to obtain a PAN.

The maximum tax rate of 33.99% sets in at an income level above INR 10,000,000.


The PAN is now mandatory, and the law prescribes a tax withholding at the higher of the prescribed rate or 20% (if the individual’s PAN is not available).

withheld by the employer (typically income other than salary). Advance tax is payable when the total income tax payable in that year exceeds INR10,000 and the tax has not been deducted at source. The advance tax is payable

due on or before 15 September (not less

than 30% of the advance tax payable), 15 December (not less than 60% of such advance tax payable during the year as reduced by the amount, if any, paid in the earlier instalments) and 15 March (the whole amount of such advance tax payable during the year as reduced by the amount or amounts, if any, paid in

2012, resident senior citizens (60 years or more) are, however, exempted from the payment of advance taxes to the extent that their income does not include any amount from a business source.

Tax payments to be made in India

Withholding tax or tax deduction at source (TDS)

Deducted by the employers or payers of income (banks, etc.,) on a month-on-month/

reporting requirements with respect to salary payments made to non-residents

Advance taxesestimated and paid in three instalments

Due dates: 15 September, 15 December and

dates would lead to a levy of interest

Self assessment tax (SAT) Payment of residual tax (after TDS and advance tax), along with payment of interest

Key facts about the Indian tax return

�

�

�if taxable income exceeds INR 500,000 in all cases and for RORs with overseas assets.

�with the tax return.

�additional disclosures if they have foreign bank accounts or assets

in any entity) or have a signing authority on any account located outside India or who are trustees of foreign trusts.

�

to be enclosed.

�matches the tax claimed in return with the online tax credit statement (Form 26AS). This can be downloaded from the income tax website and should be reviewed and matched while preparing tax returns.

11Working in India |

Provisions Act, 1952

Miscellaneous Provisions Act, 1952

through the following schemes:

�1952

�

�1976

2008) to extend the applicability of the Indian Provident Fund Scheme and Pension Scheme to a category of

An expatriate who does not hold an Indian passport and is employed with a covered establishment (employer) in India

A covered employer is:

�

Government from time to time

Indian social security2

�than 20 people that has opted for voluntary coverage under the scheme

to contribute 24% (12% each for the employer and the employee’s share) of

provident fund and pension scheme. The employer has an option to recover the employee’s share from the employee. In addition, certain additional administrative charges are levied on the contributions.

contributing to a social security program of his/her home country with whom India has entered into a social security agreement (SSA) may not be required to contribute to the provident fund in India

set out in the relevant SSA.

An international worker can withdraw the full amount in his/her provident fund account only at the time of retirement or when reaching the age of 58 years, whichever is later, or on account of permanent and total incapacity. However, with respect to members covered under a SSA, the withdrawal from provident fund is possible on the termination of assignment in India, subject to


satisfaction of conditions of the SSA. It

to both the provident fund and the pension fund are payable with respect to the total salary earned by an international

India has been taking up negotiations with various countries to put more SSAs in place. The status on these is as follows:

S. no. Country name Signed

1. Belgium Yes Yes

2. Germany Yes Yes

3. France Yes Yes

4. Switzerland Yes Yes

5. Denmark Yes Yes

6. Luxembourg Yes Yes

7. Netherlands Yes Yes

8. South Korea Yes Yes

9. Hungary Yes Yes

10. Czech Republic Yes No

11. Finland Yes No

12. Norway Yes No

13. USA No No

14. United Kingdom No No

15. Canada Yes No

16 Australia No No

17. Japan Yes No

18. Sweden Yes No

19. Portugal Yes No

20. Austria Yes No

worker irrespective of where the salary is paid. There is no clause pertaining to a minimum period of stay in India to trigger provident fund obligations.

which India has entered into a bilateral comprehensive economic agreement containing a clause on social security prior to 1 October 2008 will qualify as excluded employees on the satisfaction of some conditions. As of now, this agreement applies to employees from Singapore.


Incidence of wealth taxThe incidence of wealth tax on an individual depends on both his/her residential status and nationality.

A person’s global net wealth is taxable in India if:

The individual is an ROR in India (as discussed earlier in this document), and

He/She is an Indian national.

In all the other cases, the individual has to pay tax only on assets located in India.

Rate of tax Wealth tax is calculated as 1% of net wealth exceeding INR 3,000,000 on 31

Assets

Guest house, farm house, residential

commercial building

3 Wealth tax Act,1957

Wealth tax3

Cars

Jewelry, bullion, gold and silver utensils

Yachts, boats and aircraft

Urban land

Cash in excess of INR 50,000 (bank deposits are excluded)

some of these assets.

Wealth tax return

the same as that for personal tax return, i.e., 31 July, which is within four months

March).

As per the Finance Act 2013, certain

wealth tax return in the electronic form.


The Government of India had proposed a new direct tax law, Direct Taxes Code (DTC), in the Indian Legislature in August 2010. The revised version of DTC 2013 after taking into account some of the recommendations made by the Standing Committee on Finance has been released on 31 March 2014 for public comments. The philosophy of the code is to use simple language and reduce the scope of litigation to be brought about by removing ambiguities. While this code seeks to bring about some radical changes in the scheme of taxation, some of the key personal tax proposals that are likely to impact an individual tax payer are:

1. Tax residency rules:

a. While the status of a not ordinarily resident (NOR) has been dropped, the equivalent protection available to an NOR individual to prevent taxation on worldwide income has been retained.

b. The extension of 60 to 182 days for an Indian citizen/person of Indian origin coming on a visit to India was proposed to be removed in the DTC Bill 2010.

Direct Tax Code (DTC)

been retained in the DTC 2013 subject to the condition that such person is a resident of a country with which India has entered into an agreement for the avoidance of double taxation.

2. Taxation of employment income: This income is proposed to be taxed

through a similar approach as has been prescribed under the existing law, with some changes in the form of available exemptions and deductions. The rules setting out concessional tax treatment are yet to be published.

3. The DTC 2010 had introduced

who controls an individual under an express or implied employment

removed in the DTC 2013.


4. Wealth tax:

The DTC 2013 proposes to levy wealth tax on net wealth in excess of INR 50,00,00,000 at 0.25% as compared to INR 30,00,000 at 1% under the existing provisions. However, the wealth tax base has been widened to include all assets wherever located. Assets include tangible, intangible (including IPR possessed by individual), immovable property, rights in the asset, interest in the trust including foreign trust,

shares and securities, mutual funds,

assets.

All business assets are covered excluding stock in trade. However, land held as stock in trade is covered.

The DTC 2010 proposed to withdraw the exemption for foreign citizens with respect to assets and debts located outside India. Therefore, a foreign national becoming resident in India under the applicable tax residency rules was required to pay wealth tax on assets located outside India as well. Contrary to the above, the DTC 2013 has proposed to retain the above exemption for foreign citizens.

5. Tax rates:

The rates proposed in the DTC are in line with the existing ones, except for some minor adjustments. The existing levy of an education cess of 3% has been proposed to be dropped. Some additional threshold exemptions will apply for senior citizens aged 60 years and above. In case the income of an individual exceeds INR 10,00,00,000, then the income in excess of INR 10,00,00,000 is proposed to be taxed at 35%.

The draft DTC 2013 also proposes to relax the age of senior citizens from 65 to 60 years.

The draft DTC 2013 proposes to levy 10% additional tax on the resident recipient if the total dividend income in his hand exceeds INR 1,00,00,000.

DTC proposes to bring in radical

however, given the changes, the effective date is not certain/ known.


Banking and remittance facilities for expatriates

4

GeneralOver the years, India has liberalized regulations related to foreign exchange and the remittance of funds from the country. However, the prior approvals of the exchange control authorities are still

Bank accounts and remittance provisionsForeign nationals can open bank accounts in India, as may be permitted by the authorized dealer (banker), based on the residential status of the individual to credit his/her Indian earnings or receive funds from abroad to meet daily living expenses. Furthermore, depending on the type of account opened, the relevant conditions to operate a bank account would need to be complied with.

Individuals resident in India may be permitted to include non-resident close

6 of the Companies Act, 1956) as a joint holder(s) in their resident bank accounts

such non-resident Indian close relatives will not be eligible to operate the account during the life time of the resident account holder.

Non-resident Indians, or NRIs, are permitted to open certain bank accounts (non-resident external, etc.,) with their

documentation requirements.

or deputed in India:

the length thereof)

duration of which does not exceed three years)

A person may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if such currency, security or property was acquired, held or owned when he or she was an NR in accordance with the Foreign

The exchange control regulations also permit the release of exchange for medical treatment outside India, based on an estimate from a doctor in India or a hospital/doctor abroad. Furthermore, for the remittance of foreign exchange up to an amount of US$100,000 or its equivalent, the banker typically accepts the self declaration, which mentions that the resident is buying exchange for medical treatment outside India, without insisting on any estimate from a hospital/doctor.

The release of exchange by authorized dealers up to US$10,000 or its equivalent

private visits to any country (except Nepal and Bhutan) is available on a self-declaration basis.

The withdrawal of foreign exchange up to US$25,000 is permitted for undertaking

To enable foreign nationals to receive any pending payments on leaving India after the completion of employment, the Reserve Bank of India (RBI), India’s Central Bank, has permitted foreign nationals to re-classify their Indian resident bank accounts as non-resident ordinary rupee accounts (NRO accounts), subject to certain conditions.

Special remittance provisionsA special remittance facility is provided to (i) expatriates who are resident in India, being employees of a foreign company or a citizen of India, employed by a foreign company outside India, and in either

subsidiary/joint venture of such foreign company in India and (ii) a citizen of a foreign state resident in India being in employment with a company incorporated in India. Such categories of people have been permitted to open, hold and maintain a foreign currency bank account outside India and receive/remit the entire salary in the account, provided the Indian income tax on such salary is paid in India. The applicability of this special remittance facility for group companies needs to be evaluated, and

in such cases. In addition, individuals

100% of their net salary out of India (after the deduction of taxes, contribution to provident fund and other deductions) for the maintenance of close relatives abroad, subject to certain conditions, depending on their citizenship.


i A foreign national of non-Indian origin who has retired from an employment in India or who has inherited assets from a person resident in India or who is a widow of an Indian citizen who was resident in India

business travel or attending a conference or specialized training or for maintenance expenses of a patient going abroad for medical treatment or check up abroad or for accompanying as an attendant to a patient going abroad for medical treatment/check up.

Under a liberalized remittance scheme for individuals qualifying as residents

remittances of up to US$75,000 per

current account, as well as permissible capital account transactions, subject to certain exceptions. The remittances under the facility can be consolidated with respect to family members subject to individual family members complying with the scheme’s terms and conditions. This scheme cannot be used for the acquisition of immovable property, directly or indirectly, outside India. The scheme allows individuals to acquire and hold shares (of listed companies or otherwise) or debt instruments and maintain foreign currency accounts outside India without the approval of the RBI, subject

This limit also includes remittances toward gift and donations by a resident individual. This scheme can also be used for the remittance of funds for the acquisition of shares under a company’s

availed abroad as an NR, etc. A resident individual can invest in units of mutual funds, venture capital funds, unrated debt securities, promissory notes, etc., under this scheme. Furthermore, residents

can invest in such securities out of the bank account opened abroad under the scheme.

A foreign nationali (other than a national

of Nepal or Bhutan or a person of Indian origin) is allowed to remit an amount of

prescribed conditions and documentation. An NR Indian citizen or a person of Indian origin is allowed to remit an amount

his or her non-resident ordinary rupee

prescribed conditions and documentation.

The limits and conditions are summarized below

Cause Amount Conditions

Meeting medical expenses Any amount There has been a relaxation of condition for remittance of medical treatment abroad: up to US$ 100,000 can be remitted against self-declaration (without an estimate from a hospital or a doctor). For the remittance of an amount in excess of the limit, it needs to be accompanied with an estimate from a hospital/doctor or an Indian doctor for the treatment.

Miscellaneous purposes, including gifts and donations, unless such remittances are

Any payment beyond the

RBI’s approval

For business travel, attending conferences

US$ 25,000

For Private Visitsyear

Private visits to any country (except Nepal and Bhutan)

Accompanying as an attendant to a patient going abroad

US$25,000

Miscellaneous purposesyear (from an NRO bank account in India)

Indian citizen/PIO on becoming an NR with the completion of certain formalities and subject to


Foreign nationals can secure visas to enter India in the applicable categories listed below.

Nature of visa Purpose

Individuals intending to take up employment

Project visa For executing projects in the power and steel sectors

Business visa Visiting India on a business purpose

Tourist visa Visiting India for tourism

Student visa Pursuing studies/academic courses

Other purposes not covered elsewhere (including accompanying families of foreign nationals)

Research visa

Transit visa Travelers passing through the country

Missionary visa Missionaries of registered charitable trusts

Journalist visa Media representatives

Conference visa

Medical visa For seeking medical treatment in India at recognized and specialized hospitals and treatment centers

The Government of India has issued guidelines on the grant of visa to foreign nationals visiting India for business or employment. The guidelines specify the conditions for issuing a business or employment visa. Furthermore, the guidelines stipulate activities for which the business or employment visa may be required.

Business and employment visas cannot be converted into any other kind of visa during a foreign national’s stay in India. However, such business and employment

(dependent visa)/Medical visa, subject to the prescribed conditions and the prior approval of the Ministry of Home Affairs of India.

Visa and registration requirements for expatriates


Business visas will be granted to individuals visiting India for business purposes and not for full-time employment. They are granted this visa

applicant, as well as his or her expertise

Some of the situations where business visa will be granted are:

Foreign nationals coming to explore the possibility of setting up or actually establishing a business venture in India

Foreign nationals coming to transact business related to the purchase/sale of goods

Foreign nationals coming to India for technical meetings or attending board meetings or other general meetings for providing business services support

Foreign nationals coming for the recruitment of manpower

Foreign nationals who are partners in the business and/or function as directors of the company

Foreign nationals coming to India for consultations regarding exhibitions or for participating in exhibitions, trade fairs and business fairs

Foreign nationals coming to transact business with suppliers/potential suppliers to evaluate or monitor

orders, negotiate further supplies, etc., related to the goods or services procured from India

Foreign experts/specialists coming for a short duration for an ongoing project with the objective of monitoring progress, conducting meetings or providing high-level technical guidance

Foreign nationals coming to India for pre-sales or post-sales activity not amounting to the actual execution of any contract or project

Foreign national trainees of multinational companies for attending in-house training conducted at the regional hub of the company located in India

for internship on project-based work in companies/industries

Foreign nationals coming as tour conductors and travel agents and/or conducting business tours of foreigners or business relating to it, etc.

Business visas will be issued only from the country of origin or from the country of habitual domicile of the individual. Business visas with multiple entry facilities will be granted for a

duration, according to the individual’s requirements and respective consulate’s discretion. Furthermore, a business visa will be granted with the stipulation of a maximum stay of six months for each visit. If the maximum six-month length of the stay has not been stipulated, an endorsement requiring registration with the Foreigner Regional Registration

made on the visa.

Indian missions can grant a business visa with a validity of 10 years and a multiple-entry facility to US nationals. This visa is issued with the stipulation that the stay in India during each visit shall not exceed six months.

Business visa norms


An employment visa will be issued subject

and on the condition that the job for which the visa is being applied is neither routine, ordinary or secretarial/clerical in

are available. An employment visa will be granted to a foreign national if his or her salary exceeds US$25,000 per annum. The salary threshold of US$25,000 , however, does not apply to ethnic cooks,

teachers), translators and staff working for the concerned embassy or the High Commission in India. Some of the situations where employment visa will be granted are:

Foreign nationals coming to execute a project or a contract

Foreign nationals coming as on-

remuneration

Foreign engineers/technicians coming to install and commission equipment/machines/tools in terms of the contract for the supply of such equipment/machines/tools

Foreign nationals coming to provide technical support/services, transfer of know-how/services for which an Indian company pays fees/royalty to the foreign company

Self-employed foreign nationals providing skilled services as independent consultants

Foreign nationals who are coming to India to take up employment as the coaches of national/state-level teams or reputed sports clubs

Foreign sportsmen who are given

Indian clubs/organizations

Foreign language teachers/interpreters

Foreign specialist chefs

The government has also set out norms

within the employment visa category for foreign nationals coming to India for the

initially be for the duration of the project/contract with a multiple-entry facility, but the duration cannot exceed one year.

the country of origin or from the country of domicile of the individual, provided the period of permanent residence of the individual in that country is more than two years. A foreign technician/expert coming to India in pursuance of a bilateral

Employment visa norms


agreement between the Government of India and the foreign government, or in pursuance of a collaboration agreement that has been approved by the Government of India, can be granted an employment visa for the duration of the

whichever is less, with multiple-entry facilities.

According to recently released guidelines, no change of employer will be permitted during the currency of the employment visa within India, except with respect to the change of employment between a registered holding company and its subsidiary and vice versa or between subsidiaries of a registered holding company.

In case an employment visa is issued for more than 180 days, it is mandatory to register with the FRRO/FRO within 14 days of arrival. However, certain visas

for which registration formalities are to be processed accordingly. In cities that do

must register with the local police station.

The accompanying family members

an employment visaThe Ministry of Home Affairs has also issued guidelines for the conversion of

who is on an intra-company transfer into an employment visa, subject to various conditions as stipulated by the ministry.


A person-of-Indian-origin (PIO) card can be obtained by any expatriate who is a citizen of another country (other than

any of the following conditions:

The individual has held, at any time, an Indian passport.

The individual or any of his or her parents, grandparents or great grandparents were born in and permanently resided in India (provided neither was a citizen at any time of

The individual’s spouse is a citizen of India or a person of Indian origin. This implies that even a foreign spouse of a citizen of India or of a person of Indian origin may apply for a PIO card.

PIO card holders are granted certain

The waiver of the requirement to obtain a visa to visit India (for 15 years from obtaining the PIO card)

registration if the individual’s stay in India does not exceed 180 days

The parity with non-resident Indians (NRIs) with respect to all facilities available to them in the economic,

eligible to apply for an OCI card if he/she possesses evidence of self or parents or grand parents:

�India at the time of commencement of the Indian Constitution, i.e., January

�

OR

�January 1950.

for matters related to the acquisition of agricultural/ plantation properties (no parity will be allowed in the sphere of political rights)

Facilities for obtaining admission to educational institutions in India

schemes of the Life Insurance Corporation of India, state governments and other government agencies

Overseas Citizen of India (OCI) cardIndia allows persons of Indian origin who are also citizens of other countries to acquire overseas citizenship of India, without surrendering the citizenship of the other country.

An OCI card is a multiple entry life-long visa to visit India. Furthermore, there is no FRRO registration required for OCI card holders. A person registered as an OCI for

for Indian citizenship.

A foreign national of Indian origin (except citizen of Pakistan and Bangladesh) is

PIO card and OCI card


Before leaving the country, a foreign national who is not domiciled in India is required to furnish an undertaking to the prescribed authority and obtain a no-

for business, professional or employment activities. Such an undertaking must be obtained from the expatriate’s employer or the payer of the income.

An exemption from obtaining the no-

tourists or individuals visiting India for purposes other than business or employment, regardless of the number of days spent by them in India.

For an individual domiciled in India, his or her PAN, the purpose of the visit outside India and the estimated time period for the stay outside India must be provided to the authorities. However, such an individual may also be required to obtain

In addition, if he/she has been registered with FRRO/FRO, he/she is also required to intimate his/her departure to the immigration authorities in a prescribed manner.

Departure compliances


Personal baggage rules5

An expatriate is eligible to import into

under the Customs Act), which includes personal/household effects (except

alcoholic liquor/wines in excess of two liters, music system and color television)

of customs duty. With effect from 01

the import of jewelry by an expartriate has been enhanced from INR10,000 to INR50,000 in the case of men and INR20,000 to INR1,00,000 in the case of women . However, this is permitted on

to the satisfaction of all of the following conditions:

The expatriate has lived abroad for a minimum of two years immediately preceding the date of his or her arrival in India. Short visits made by the expatriate to India during the aforesaid period of two years will be ignored if the total duration of stay on these visits does not exceed six months over the two-year period.

The expatriate has not availed the

preceding three years.

The above conditions will also apply to unaccompanied baggage. In case of unaccompanied baggage, the goods should have been in the possession of the expatriate abroad and be shipped within a month of his or her arrival in India. The goods may also be received in India for up to a period of two months prior to the arrival of the expatriate in India.

Furthermore, all of the goods imported as

limits (except certain items such as motor vehicles, goods imported through

heading and are liable to a single rate of the effective customs duty of 36.05%.

In the case of an Indian passenger who has been residing abroad for over one year, the duty free clearance of jewelry

a passenger returning to India has been enhanced from INR10,000 to INR50,000 in the case of men and INR20,000 to INR1,00,000 in the case of women.

washing machines, laptop) are exempt from the levy of customs duty in the case

conditioners, music systems, home theater systems) attract the effective customs duty at a concessional rate of 15.45% ad valorem, subject to the satisfaction of certain conditions.

Furthermore, under the relevant rules, there are different exemption limits for baggage belonging to different classes of persons coming to India. The

as age, duration of stay abroad, origin (Indian/foreign) and the country visited. This exemption cannot be pooled with that of any other passenger. If the value of baggage exceeds exemption limits, the duty is calculated in excess of such an amount.

With effect from 17 March 2012, the duty free allowance under the Baggage Rules, 1998 has been increased from INR25,000 to INR35,000 for all of the passengers of age 10 years and above (of Indian origin) returning after a stay abroad for more than three days. Also, the duty free allowance for all of the passengers of age 10 years and above (of Indian origin) returning after a stay abroad for three days or less has been increased from INR12,000 to INR15,000.

a minimum period of stay in India for a

5 Baggage Rules, 1998 (updated in 2012)


passenger to avail of the concessions

baggage on the transfer of residence.

the employer of the expatriate to the effect that his/her employment is being transferred to India is required to be submitted to the customs authorities. Furthermore, a self declaration to the effect that goods have been in his/her possession abroad or that the goods are purchased by such a person at the time of his or her arrival at the international airport (before clearance from customs) is required to be submitted to the customs authorities.

With effect from March 01, 2014,

declare Indian currency exceeding INR 10,000 being brought by them in addition to prohibited articles, gold jewellery (over the free allowance), gold bullion etc. The passengers also have to declare the number of baggage, including hand baggage, while entering into the country. All passengers coming to India will have to

different from the detachable perforated strip which is a part of the immigration card at the moment.

List of useful websitesFor income tax regulations: www.incometaxindia.gov.in

For foreign exchange and control regulations: www.rbi.org.in

For visa-related information: www.mha.nic.in/ForeigDiv/foreigners_division.htm

For information on Indian tourism: www.incredibleindia.org

For the directory of bank websites: www.banknetindia.com/banklinks.htm

For baggage rules: www.cbec.gov.in


Our team

Sonu Iyer Partner and National Leader Human Capital Global Mobility +91 11 4363 3160 [email protected]

Amarpal S. Chadha Partner +91 80 6727 5258 [email protected]

Dinesh Agarwal Partner +91 33 6615 3470 [email protected]

Pramod Achuthan Partner +91 20 66036012 [email protected]

Mayur Shah

+91 22 6192 1104 [email protected]

Alok Agrawal Director +91 80 6727 5000 [email protected]


Ahmedabad

Near. C.N VidhyalayaAmbawadi, Ahmedabad-380015Tel: +91 79 6608 3800Fax: +91 79 6608 3900

Bengaluru

No.24, Vittal Mallya RoadBengaluru-560 001Tel: +91 80 4027 5000 +91 80 6727 5000

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ChennaiTidel Park6th & 7th FloorA Block, No.4, Rajiv Gandhi SalaiTaramani, Chennai-600113Tel: +91 44 6654 8100Fax: +91 44 2254 0120

Hyderabad

Hitech City, MadhapurHyderabad - 500081Tel: +91 40 6736 2000Fax: +91 40 6736 2200

Kochi

NH-49, Maradu POKochi - 682 304Tel: +91 484 304 4000Fax: +91 484 270 5393

Kolkata22, Camac Street

Kolkata-700 016Tel: +91 33 6615 3400Fax: +91 33 2281 7750

Mumbai14th Floor, The Ruby29 Senapati Bapat MargDadar (west)Mumbai-400 028, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 1000

5th Floor Block B-2Nirlon Knowledge Park

Mumbai-400 063, IndiaTel: +91 22 6192 0000Fax: +91 22 6192 3000

NCRGolf View Corporate

Sector 42

Tel: +91 124 464 4000Fax: +91 124 464 4050

18-20 Kasturba Gandhi MargNew Delhi-110 001Tel: +91 11 4363 3000Fax: +91 11 4363 3200

4th & 5th Floor, Plot No 2BTower 2, Sector 126NOIDA-201 304Gautam Budh Nagar, U.P. IndiaTel: +91 120 671 7000Fax: +91 120 671 7171

Pune

Panchshil Tech ParkYerwada (Near Don Bosco School)Pune-411 006Tel: +91 20 6603 6000Fax: +91 20 6601 5900

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