Are Overseas Consultancy Fees Taxable in India? Seeking Advice on Tax Filing for 2014

One of our employees resigned, and his salary was processed and transferred to his account until July 2014. From August 2014, he joined as a consultant outside India, let's say overseas. Currently, he is earning professional fees for his consultancy, and the money is being transferred to his Indian account. He will be completing his consultancy by December 2014 and will be back in India. I need to know whether the fees received as non-taxable will be taxed in India when filing the returns and under which section this will be taxed.

Regards,
Gopal

Is your employee an Indian citizen or an expat? For Indian employees, if the amount payable exceeds Rs 30,000 in one financial year, then under section 194J of the IT Act, 10% TDS is deducted before paying the consulting charges. This rule applies to individual professionals only and not to companies. Your accounts department should be aware of this.

Thanks,
Dinesh Divekar

Thank you for your above suggestion. Please note that the employee I am referring to is an Indian citizen, and of course, his income exceeds 30,000. However, please note that he has now earned consultancy fees as non-taxable for the consultation done overseas. My question is whether this income would be considered taxable in India when he files his current year IT return. I kindly request your advice on the above matter.

Regards,
Gopal