AAR Decides on Taxability of Non-Resident Indian’s Salary and Incorporation of Foreign Tax Credits in the Calculation of Resident’s Withholding Tax

Abstract

This case note outlines the recent ruling issued by the Authority for Advance Rulings to Texas Instruments India Private Limited, which determined that the salary paid in India to a non-resident Indian in respect of services rendered in the United States was not taxable in India, and that foreign tax credits available to a resident and ordinary resident of India may be taken into account in the calculation of the amount of withholding tax that is to be deducted by the employer from the resident’s salary.