Hi, I'm a Central Gov't employee on a study leave for my PhD in geochemistry at Perth,Australia.I am also the receipient of the International scholarship from the University which pays for my tuition fees and gives me a living allowance.I have completed one and half years of my study. What are my tax liabilities?
RE:tax liabilities
by Amitabh on Apr 23, 2007 10:49 AM Permalink
Under Indian Income Tax Act,scholarships are exempt from tax.Since you are a non resident in this period,income accruing/received by you outside India will not be taxed in india.
RE:tax liabilities
by abhijit das on Apr 23, 2007 03:25 PM Permalink
Thanks so much. But study leave entitles me my full salary for 2 years,which my family is drawing presently. Also can you please state the IT rule/clause so that I can cite it in future references? Thanks once again!
RE:tax liabilities
by Amitabh on Apr 23, 2007 05:00 PM Permalink
The salary that your family is drawing in India is taxable in your hands as that income is being received (and even accrued) in India.Scholarship is exempt under Sec 10(16) of the Income Tax Act.For definition of resident/non resident and taxation implications thereof,refer to Sec 5 of Income Tax Act 1961.
RE:tax liabilities
by Amitabh on Apr 23, 2007 05:08 PM Permalink
For getting the definition of resident/non resident you may see Sec 6 of the Income Tax Act 1961.Also,the taxability issues discussed here are relevant only from Indian law.It may happen that you are taxed in Australia on the amounts received there and also on the salary you receive in India if you are Australian resident as per their tax laws.If this be the case,you will have to look at the double taxation avoidance agreement,if any ,between India and Australia or any other provision in the Australian law that gives you credit for the tax you pay in India on your Indian salary.
