How much would I pay on Taxes?

YANKEECAT

Hello,

I'll be moving to Bangalore next month, and I will like some information about:

How much could I expect to pay in Tax deduction monthly from my salary? (Salary INR 500, 000 per month)

What will be the cost of a furnished apartment on good area near the airport?

Company provides a drive to/from work but not for personal leisure.
How much would I pay for a driver (with car) a month?


Thank you

*jyoti*

Where are you going to be working? There are no good areas near the airport -- it is 20 - 30 km from the city. So being close to where you're working is probably a better option (even with a driver it can take two hours to cross the city, surely not something you want to do every day).

No idea about the taxes.

arunganpath

Keep aside 30% for your taxes.

YANKEECAT

Wow....that's INR 150,000 or $3242 USD, that's quite a lot dont you thing? Is there other way to make it a more comfortable tax deduction??

YANKEECAT

I am on the aviation field and need to be within one hour call time from the airport.

Any suggestions?

Company is looking for a furnish apartment near the airport but I just want to make sure it isn't the worst out there! The budget is INR50,000 would they find me something descent with that amount?

arunganpath

Nothing comfortable other than thinking your salary is INR 350,000. If accomodation is given by the company, there would be tax on perquisites too !

Never thought being a Chartered Accountant, I shall give professional advise to somebody in Indiamike..

Yankeecat, my bill is on the way !

YANKEECAT

Thnx arunganpath.....I am still on the process of negotiating with the company about this.
Usually on the type of field that I am salary is pay as net, and this is the reason why.
I also read somewhere that my salary falls in the +3.99% deduction on top of the 30% you mentioned.
This is worst than NY. Why INR350,000? What king of tax percentage will this figure fall into?

arunganpath

There was surcharge of 10% and a cess of 3% over and above the surcharge. Now that surcharge is removed, there is only cess. So, your effective tax rate would be 30.9%. I had given 30% considering some minimum exemption and deduction due to tax savings.

dillichaat

Want to trade places with me? My top tax bracket is 52.5%. But o.t.o.h. it's invested in good infrastructure, schools, universal medical care, universal pensions...so I'm not complaining although I'm a serious net contributor to the system and being abroad, can't profit from it.

Try to negotiate a net package, most expats do this. Also, I don't know how expensive housing is in Bangalore but where I am in Delhi it costs a very tidy sum indeed to have something approaching western comfort (think slightly lower than Manhattan prices). Make sure you figure this out, else not much will be left of your 350k/month.

__________________
When the wise man points out the black hole, the fool looks at the finger.

traveller.1

All the advice given is correct for ball park purposes. Theonly way out is to spend less than 180 days per financial year in India and spend more than 330 days out side the US. This will allow you complete exemption from Indias taxes and exemption up to I believe, USD91,000.

So you spend 179 days in India about 152 days in other countries. Put in 20% into 401K and you are effectively earning 10 grand American per month tax free.

PS I am not a tax advisor. This is my observation, which may or may not be correct. Consult your own tax advisor

YANKEECAT

Well this is probably doable since my job requires 100% travel.
I am on the aviation sector!

thank you!

I will consult with a tax advicer for further understanding.

Once again thank you all for the great information.

Nick-H

You will certainly need professional advice to make the most of your situation. I don't know how the situation is for employees, I guess your employer deducts tax as you go along, like British Pay As You Earn. Those of us that live on savings and investments (above a certain level, and if we elect not to have tax deducted at source) have to pay our taxes quarterly in advance!

Still, when I have self-esteem issues, I can reflect that the Indian tax authority considers me a Higher Net-Worth Individual . (which doesn't make me rich: my annual income is not much more than a couple of months of yours).

YANKEECAT

Wondering as well if anyone can tell me what the weather is like now and how it will be for the next coming coming months?
Just trying to get an idea of what to pack

thnx

arunganpath

To get exemption from Indian Taxes, you should be employed outside India. If you are employed in India and even if you stay for less than 180 days, you are liable to pay tax on income earned in India.

Sec 9 (1) (ii) of the Income Tax Act, 1961 reads this..

Quote :

The following incomes shall be deemed to accrue or arise in India :

(ii) income which falls under the head Salaries, if it is earned in India.

[Explanation.For the removal of doubts, it is hereby declared that the income of the nature referred to in this clause payable for

(a) service rendered in India; and

(b) the rest period or leave period which is preceded and succeeded by services rendered in India and forms part of the service contract of employment,

shall be regarded as income earned in India ;]

Unquote :

I feel, you need to pay tax on any income earned in India.. So, get a opinion from a tax consultant.

manojb

Income earned in India is taxable in India regardless of where you spend your time.