Hi Mr. Anil,
Its very much clear from artcile that any foreign allowance brought to India is taxable.
But, can you please still tell me which are the methods by which we can save the tax in India?
e.g. If somebody comes to India after foreign trip and he is carrying the Travel card (Multicurrency Card) in which there are 1000USD.
But the person was there only for 3 to 4 months.
Now, if he encashes this USD from the card owned bank into INR then, whether the money in INR will be taxable?
If yes, is there any mechanicsm, we can save the tax on this money?
Can you please help me to clarify my three doubts?
When you en-cash the travel card, there is no tax deducted by bank.
It is up-to you to declare this cash as your income while filing ITR. If yo do not declare, you save full tax.
If you declare, it is added to your income and tax as per the relevant slab.
Your choice. There is no other way i know that can make this saved money tax free.
Thanks again for giving crystal clear answers.
One little doubt, I have spent the Indian currencies while abroad. i.e. I did some flight booking using Indian Credit Card.
These flights were the abroad traveled flights.
As I my multi-currency travel card did not get swiped may be due to some technical problem, I was forced to use the Indian Credit Card.
So, when I return to India, can I deduct this spent amount from the converted USD to INR amount?
I mean when I come to India, I’ll convert the money in the card in to INR from the Bank.
Say I have 50000 INR. And while submitting ITR, I will deduct the amount spent amount on flight say INR 30000.
Thus, in ITR, I can show the amount 50000-30000 = 20000. Thus, I will show the 20000 INR as my extra income.
Is this correct?
Ya, you can do that.
See, the whole thing revolves around declaring and not declaring it in your ITR.
If you declare and if the amount is substantial enough to raise eye brows in IT department, then they might ask for proofs.
For smaller amount (usually less than 10 lakhs), nobody even bothers!
So, even if you do not declare and keep the money in cash in hand, you will be good.
But, if you want to declare it the way you have explained, you can do it and keep the proofs like credit card statement, in case the IT officer brings your case to Audit.
Thank you very much!
Thanks a lot!
You are welcome.
Let me know if you need more information.