For a non-Indian resident, any income earned and received outside India is not taxable in India.

I am working in the US, and want to transfer half my salary that to my savings account in India. I am paying taxes in the US. Will I have to pay taxes in India too? 

– Ravi Iyer, email 

For a non-Indian resident, any income earned and received outside India is not taxable in India. In your case, since your salary is earned, received and taxed in the US, and if your residential status as per Indian income tax rules is that of a non-resident, you will not attract any tax liability on the remittances made to your Indian accounts. Your account will be designated as a Non Resident’s Ordinary account (NRO). You also have the option of remitting funds to a Non Resident’s External Account (NRE).

I am 27 years old and my cost to company is Rs 1.87 lakh per annum. How should I invest to avoid paying tax and filing return of income?

– Sujal Dixit, Pune

For tax planning, it is important to know the break-up of your CTC. Some of the common components of CTC are basic salary, house rent allowance, conveyance allowance, medical allowance and leave travel concession. Subject to conditions, a part or whole of these allowances are exempt from income tax. You will arrive at the net taxable income after accounting for the exempt allowances.

For financial year 2007-08, you will get a basic exemption of Rs 1.1 lakh out of the net taxable income. If you get a balance amount after applying the basic exemption limit, you can invest it in any of the tax-saving schemes listed under Section 80C of the Income Tax Act, 1961, to avoid paying tax and filing the return of income.

Coming to your not filing the return of income since your taxable income would be nil, my advice would be that income tax offcer can invoke his discretionary power under section 271F to impose a penalty of Rs 5,000 in the event of your not filing the return of income.

Even otherwise under section 139 you are required  to file the return of income in order to disclose fully your gross total income and the deduction that you claim from the same to arrive at the taxable income even if it is nil.

In your recent write up on Tax on Gifts you have not clarified fully when the basic exemption for gifts from non-relatives which was Rs 25,000 has been now raised to Rs 50,000. Please clarify the latest position since I am planning to receive such gifts amounting to Rs 1 lakh during the current year

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