Moving from... India

Welcome to your tax information guide on leaving India. Our detailed Q&A guide has been split into 6 key areas in order to help you find the information you need - quickly and easily! 

This guide is for reference only and professional tax advice should be taken before any action is taken.
 
Before/Once you depart
 

Q. Should I complete any documentation prior to leaving India?
A. If you are domiciled in India and departing from India, you should furnish the following documents to the Indian revenue authorities:

• the permanent account number allotted to you or certificate in prescribed form

• the purpose of visit outside India 

• the estimated period of your stay outside India 

You should obtain a no objection certificate if the Assessing Officer considers that a tax clearance certificate is necessary.

If you are not domiciled in India and have come to India in connection with business, profession or employment and have income derived from source in India, you should furnish to the Indian revenue authorities an undertaking from the employer or any person who is payer of such income to effect that the tax payable by you shall be paid by the employer or payer of the income. The Indian revenue authorities shall on receipt of the undertaking issue a no objection certificate for leaving India.
 
Q. Should I open an offshore bank account?
A. Non residents of India are not liable to tax in respect of interest earned on offshore bank accounts, and it may also be advisable to open such an account from the tax perspective of the country that you are going to.

 
Tax - Basics
 

Q. Will I be regarded as not resident in India during my period overseas?
A. You are resident for a particular year if either of the following conditions is satisfied:

• You are present in India for 182 days or more in the year; or

• You are present in India for 60 days or more, and within the four preceding years has been in India for 365 days or more. 

The 60-day requirement is relaxed to 182 days for Indian citizens leaving India as crew members of an Indian ship or for the purpose of employment outside India. The 60-day requirement is also relaxed to 182 days for citizens or persons of Indian origin who come from outside India for a visit in a particular year.

Therefore if you leave India and do not satisfy these conditions you will be regarded as not resident during your absence.

 
 Tax - Administration
 

Q. Will I still need to complete an Indian tax return after my departure?
A. If you have income which is liable to Indian tax, you are required to file a tax return. There are certain other limited circumstances in which you must file a return.

If you are a non-resident with no taxable income for the year then you are not required to file a return.

Tax - Income from employment
 

Q. Will I have to pay Indian tax in respect of the employment income I will earn overseas?
A. This will depend upon your residence status. Persons who are resident and ordinarily resident are taxed on worldwide income.  Non-residents are subject to Indian tax only on income arising in or received in (or deemed to arise in or to be received in) India. 

 
Tax - Other
 

Q. Will I have to pay tax in respect of Indian investment income earned while overseas?
A. Subject to the exemptions and tax relief in respect of certain interest and dividend payments, residents and non-residents are subject to Indian tax on all income arising in India, including interest and dividend income.

Q. I plan to sell my Indian property while overseas. Are there any capital gains tax implications?
A. Yes, you will be liable to capital gains tax if you sell Indian properties while overseas. For tax implications, please see India-Inbound under the heading `Tax - Other Income`.

Q. I have a number of Indian company shares. Will I remain liable to Indian capital gains tax if I sell any of these while outside India?
A. Yes, you will be liable to capital gains tax if you sell shares of Indian company while overseas. For tax implications, please see India-Inbound under the heading `Tax - Other Income`.

Social Security
 

Q. What Social Security contributions will I pay when abroad?
A. You will pay Social Security contributions in the country you are going to due to the absence of any Social Security agreements with other countries.