In a significant development for tax professionals and multinational employers, the Institute of Chartered Accountants of India (ICAI) has released the Sixth Edition of its “Technical Guide on Expatriates Taxation”, comprehensively revising the publication to reflect major legislative, regulatory, and procedural changes impacting cross-border employment and global workforce mobility.
Issued by the Committee on International Taxation, ICAI, the revised guide responds to the growing complexity of expatriate taxation in an increasingly globalised economy, where both Indian professionals working overseas and foreign nationals working in India face overlapping tax, social security, exchange control, and treaty compliance obligations.
Focus on Changing Global Mobility Landscape
In his foreword, CA. Charanjot Singh Nanda, President, ICAI, highlighted that cross-border movement of talent has become a strategic necessity for organisations, while simultaneously raising intricate tax and compliance challenges. He noted that the revised guide equips professionals to navigate evolving domestic tax provisions and international treaty frameworks with greater clarity and confidence.
Key Legislative Updates Covered
The Sixth Edition incorporates several critical statutory and policy developments, including:
- Revised residential status rules, covering deemed residency provisions and expanded physical presence thresholds, which significantly impact taxation of global income for Indian citizens and Persons of Indian Origin
- Analysis of the default concessional tax regime under section 115BAC, now applicable unless expressly opted out, and its implications for expatriate salary structures, allowances, and perquisites
- Updated capital gains taxation, including post-July 2024 rate rationalisation and withdrawal of indexation benefits in specified cases
- Detailed guidance on withholding tax obligations under section 195, especially for salary paid outside India for services rendered in India
- Procedural compliance updates, including electronic filing of Form 10F and documentation for claiming DTAA relief.
Comprehensive Treatment of Inbound and Outbound Expatriates
The guide provides structured analysis of both inbound expatriates (foreign nationals working in India) and outbound expatriates (Indian employees working abroad), examining various deployment models such as business visits, short-term assignments, long-term secondments, and permanent relocations. It also flags risks relating to Permanent Establishment (PE) exposure, transfer pricing, and GST implications in secondment arrangements.
Social Security and FEMA Compliance
A dedicated section addresses Provident Fund obligations for international workers, Social Security Agreements (SSAs) signed by India, contribution requirements, and withdrawal conditions. The guide also examines FEMA and exchange control provisions, including permissible salary remittances and banking arrangements for expatriates, making it a broader regulatory reference rather than a tax-only manual.
Black Money Act and Reporting Obligations
Notably, the revised edition integrates compliance requirements under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, highlighting disclosure obligations for foreign assets and income, an area of growing scrutiny by Indian tax authorities.
Professional Contributions and Editorial Oversight
The revision was led by CA. Sanjay Kumar Agarwal, Chairman, and CA. Chandrashekhar Vasant Chitale, Vice-Chairman, Committee on International Taxation. ICAI acknowledged the contributions of multiple committee members and subject experts, including Mr. S. P. Singh (Ex-IRS), whose inputs enhanced the analytical depth and policy orientation of the guide.
A Practical Reference for Practitioners
ICAI stated that the Sixth Edition is intended to serve as a practical and authoritative reference for chartered accountants, tax advisors, corporate professionals, and policy stakeholders dealing with international assignments and cross-border employment structures.
With global mobility expected to increase further, the updated guide is likely to play a critical role in promoting informed advisory, robust compliance, and consistency in the application of India’s international tax framework.
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