One of the drivers of the tech driven boom in India has been the earnings of Indian IT professionals while on assignments abroad.

India’s IT employees will have to pay tax on earnings from overseas assignments as per the Authority of Advance Rulings (AAR). A report in the Times of India quotes AAR as saying that there is no escape from paying tax on amounts earned during stints abroad with the employer’s foreign affiliates.

The gist of the ruling in the case of an Infosys employee is that tax on income earned during the deputation abroad has to be paid either in India or in the country in which the deputed employee was working.

IT ( Income Tax not Information Technology in this case!) officials said;”If the company is subject to Indian tax laws, the employee will have to pay taxes in India even if the income was earned overseas and the manager has claimed NRI (non-resident Indian) status by virtue of having spent the stipulated number of days outside the country.”

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