South Korean employer paid him salary in dollars; tax department sends notice
A Karnataka man working in South Korea faced an income tax notice over his salary deposited in an NRE account in India. The Income Tax Assessing Officer claimed the salary was taxable in India due to his employment. However, the ITAT Bangalore found that the man had established his non-resident status.
An employee from Karnataka received salary payments in US dollars from his South Korean employer, Ocean Rig UDW Inc., which was contracted by Samsung Heavy Industries. The salary was transferred directly to the man's Non-Resident External (NRE) bank account in India. However, the Income Tax Assessing Officer (AO) in Bangalore issued a tax notice, claiming that the man was employed by a foreign company and was liable to pay income tax on his foreign salary.
The man challenged the assessment order in ITAT Bangalore, where it was ruled in his favor. The tribunal held that the bank statements and passport entries established his non-resident status, and the foreign salary was not taxable in India. The ITAT also emphasized that the AO's decision disregarding the provided evidence was incorrect, as the man had already demonstrated his non-resident status through his passport and bank records.
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