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FEMA AND INCOME TAX PROVISIONS

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Mathews K Augustine asked about 3 years ago

Mr.X is a person of Indian origin residing in UK and also employed in a company there(Say Company A).Company A is providing software services to its clients. The client of company A succeeds because of Company A's employees valuable service. So the Client company of company A decided to give Equity shares as gift to the employees of company A.All the dividend income will be received in his account in India as holding shares by an employee of a company other than his own company is illegal there.So if he decides to credit the amount in the name of a person in India,what are the rules and regulations he has to comply with under Income tax and FEMA act? Reply ASAP

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Open uri20170510 32134 ng4pv?1494421709 SONIYA answered about 3 years ago

Under the Income-tax Law, an individual will be treated as a resident in India for a year if he satisfies any of the following conditions: 1. He is in India for a period of at least 182 days in that year or 2. He is in India for a period of at least 60 days in that year **+** for a period of at least 365 days in immediately preceding 4 years. If an individual does not satisfy any of the above conditions then he will be treated as non-resident in India. Therefore considering Mr x , a Non resident in India , the receipt of dividend from foreign company is not taxable in India provided mr x is Holding the shares of foreign company and after being eligible for dividend it is just credited in India , so no taxablility arises in India

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