Residential status in India determines tax liability
Ordinarily resident’s global income is taxable in India
I worked in Sweden for about two months this year. What will be the tax implication of my earnings there?
The tax implications in India of income earned in Sweden would depend upon your tax residential status in India during the financial year 2013-14. Your residential status, in turn, would be determined by your physical presence in India during the fiscal and immediately preceding seven fiscals.
Assuming that you have primarily been based in India and have worked in Sweden for about two months, you are likely to qualify as ordinarily resident (OR) of India. Accordingly, your global income shall be taxable in India irrespective of source or place of receipt of such income.
The income earned in Sweden shall be taxable in India subject to the overall benefits available under the Double Tax Avoidance Agreement between India and Sweden.
If you had received any per diem (per day) accommodation etc., the taxability of the same would need to be examined.
Further, as you would qualify as an OR, if you have any assets located outside India, then, you would be required to furnish details of assets such as foreign bank accounts, immovable property, etc., in the income tax return.
Any failure to comply with the above disclosure requirement may attract penal consequences. However, depending upon your stay in India, if you qualify as either non-resident or not ordinarily resident in FY2013-14, you shall be taxable in India only on India-sourced income. Accordingly, the income earned in Sweden for rendering services there shall not be taxable in India provided the salary is directly credited to an overseas bank account.
If the salary is directly credited to your Indian bank account, then the same shall be taxable in the first instance in India on receipt basis.
I have recently retired from central government service. I have paid a lump sum amount of Rs.39,100 towards one-time contribution towards Central Government Health Scheme (CGHS) to avail medical facilities. How much tax deduction will I get out of it and under which section?
You can claim deduction towards the contributions made to CGHS for self and family under section 80D subject to the overall cap of Rs.15,000 per fiscal. Further, if you or your family member in respect of whom the contributions are made to CGHS, is a senior citizen (i.e., 60 years or more in age), the deduction can be availed up to Rs.20,000 per fiscal. The contributions can be made in any mode other than cash. The term “family” shall include spouse and dependant children.