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Tax for Living in a foreign country

Tax for Living in a foreign country

It’s been 3 years since Arjun moved to the US. He is paid in US dollars. He has his money invested in savings account and FDs in India. He has bought an apartment and gave it on rent for Rs.35,000 per month. He gifts his parents a car and transfers Rs.10,000 every month to their account to help with their household expenses during the year. He also transfers Rs 20,000 in his father’s account to meet the cost of insurance policy he has purchased for his parents.

Rental incomeRs 4,20,000
Less: Standard 30% deduction under Section 24Rs.1,26,000
Income from House PropertyRs 2,94,000
Income from FDs and bank accountRs 30,000
Gross total incomeRs 3,24,000
Deduction under Section 80DRs.20,000
Taxable incomeRs.3,04,000

1 Arjun’s gift to his father and money transfer of Rs. 10,000 to his mother are exempt from tax. Regarding the insurance expenses on his parents, Rahul can claim a deduction under section 80D of Rs 20,000, since his father is over 65 years of age.

He will be required to file tax return in India as his gross income exceeds Rs. 2,50,000.

Tax for Living in a foreign country



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