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India Expatriate Income Tax Basics — Residency Determination, Tax Rates, PAN Card, Filing Schedule

By ARAZIA India Desk8 min read

India PAN Card Sample — Required Documents for Income Tax Return for Expatriates in India — PageImp (CC BY-SA 4.0, Wikimedia Commons)

Once you are dispatched to India and start receiving salary, it is not long before you are asked by your company's human resources department or local account manager, "Do you have PAN?", "Are you a resident this fiscal year?" You will be asked the same question. It may sound unfamiliar at first, but when you actually experience it, India's income tax system is not very different from Korea's. However, if you learn in advance about some unique features of India, such as the fact that the fiscal year starts in April and the range of income to be reported is completely different depending on whether you are a resident, you will be much less likely to be embarrassed by tax issues later.

When you live locally, it's easy to think that you don't have to worry about income tax because most companies take care of it through withholding tax (TDS). However, from the moment you meet the 'resident' requirements under tax law, you may have to report even interest, dividends, and rental income generated in Korea to India, and if you do not have a PAN card, there are practical disadvantages such as having your salary withheld at a much higher tax rate.Initial administrative procedures for settlement in IndiaAs we conclude, it is a good idea to consider the income tax structure as a big picture.

In this article, we discuss the most curious questions expatriates in India have when encountering income tax for the first time.Residency determination criteria, approximate tax rate structure, PAN card application method, reporting scheduleArranged in order. Since specific tax rates, deduction items, and reporting deadlines may be revised every fiscal year, we recommend that you refer to this article for the purpose of catching the general trend and be sure to obtain confirmation from your company's tax agent or certified public accountant (CA) before actually reporting.

01Determination of residency — Who is a ‘resident’ under Indian tax law?

The first step to understanding Indian income tax isResident Statusno see. This is because even for the same foreigner, the scope of taxation is completely different depending on the number of days stayed in India and past stay history. The Indian Income Tax Act generally applies during the relevant fiscal year (April to March of the following year).Physical stay in India for more than a certain number of daysResident status is determined based on whether or not you are a resident, and in detail, there are auxiliary requirements that consider the period of residence and past stay history in India. The exact number of days may vary depending on your personal circumstances (whether you are from India or not, your income level in the previous year, etc.), so it is best to check with your accountant for the actual determination.

Taxation range depending on type of residence

Resident Type	tax range
Non-Resident (NR)	Only income earned or received within India is taxable.
Resident but not normally resident (RNOR)	Income from within India + some foreign income directly related to business or occupation in India
Resident and Ordinarily Resident (ROR)	Income within India as well as KoreaAll income worldwidesubject to this tax

Expatriates in their first 1 to 2 years of employment are usually classified as NR or RNOR and are taxed only on their income within India. However, the longer the stay, the more likely they are to be converted to ROR. It is a good idea to get into the habit of checking with your company tax preparer at the beginning of each fiscal year to determine which type you fall into this year.

02Tax rate structure – approximate tax brackets and things to know

India's income tax is similar to Korea's; the higher the income bracket, the higher the tax rate.progressive tax rateIt's a structure. In recent years, India has had fewer deductions and lower tax rates.New Tax RegimeWow, you can apply for various deductions and exemptions.Old Tax RegimeWe operate a structure that allows salary earners to select one of the following every fiscal year. Recently, the new tax system is becoming the default option, but which of the two systems is more advantageous depends on the size of the individual's deduction items (housing rent, insurance premiums, etc.).

Approximate example of tax bracket (subject to change as of 2026)

income range	Approximate tax rate level
duty-free zone	0%
low income range	Approximately 5%
middle income range	Approximately 10-20% level
high income range	Approximately 20-30% level
highest income range	Approximately 30%

In addition, the calculated tax amount isHealth and Education Cess (normally 4%)is added additionally, and in the high-income section, a separateSurchargemay be added. The exact amount and tax rate for each section changes every year with the announcement of the Union Budget, so the latest figures must be used.Information on overseas remittance and currency exchangePlease check with the official website of Income Tax Department of India.

03PAN Card — How to apply and why it is required

PAN(Permanent Account Number)is a 10-digit alphanumeric unique identification number issued by the Indian Income Tax Service, and is used as a means of identification not only for income tax reporting, but also for salary withholding, opening bank accounts, and real estate and financial transactions over a certain amount. Although it is not completely the same as Korea's resident registration number, it can be understood as a key number in financial and tax life without which virtually nothing can be done.

What is especially important from the expatriate’s perspective is:If you receive salary without PAN, the company will have no choice but to withhold tax at a much higher tax rate.is true. This is the most common cause of delays in opening a bank account and processing your payroll early in your new job, so it's a good idea to start the application process right after you arrive.

Required documents for foreigners applying for PAN

Copy of passport (often used as proof of identity and address)
copy of visa
Proof of residence address in India (rental agreement, Form C, etc.)
passport photo
Complete the foreign application-specific form (Form 49AA)

Applications can be made through the online portal of an agency designated by the Income Tax Department of India (Protean eGov, formerly NSDL / UTIITSL, etc.), and after online submission, a physical card is usually mailed to the registered address. Processing times and document requirements may vary depending on the time of year, so please check the official site for the latest information before applying.

04Reporting Schedule and Required Documents — From Form 16 to ITR submission

India's financial year isFrom April 1st every year to March 31st of the following yearReporting of income during this period is usually made in the following year. If you are a salaried earner, your company willForm 16They issue a document called, which is similar in concept to Korea's withholding tax receipt and lists the salary paid and tax withheld for one year. This Form 16 serves as the basic data when preparing your personal income tax return (ITR).

Report flow summary

From the company after the end of the fiscal year (March 31)Form 16Receipt (usually around June)
Link your bank account information with PANFill out ITR return on e-filing portal
If you have income other than salary (interest, rent, overseas income, etc.), report it together in a separate item.
Submit your report within the due date and pay the remaining tax amount if necessary.

The reporting deadline for salaried income earners is usuallyAt the end of July after the end of the fiscal yearAlthough it is known before and after, the government sometimes adjusts or extends the deadline every year, so it is safe to check the official notice every year. If your income is above a certain level, quarterly throughout the year.Advance TaxYou may have to pay, but this mainly applies to those who have additional income (rental, investment, etc.) rather than expatriates who only have salary income.

Office space piled with tax return documents — Preparing income tax returns for expatriates in India — It is a good idea to prepare the documents required for income tax reporting, such as copies of Form 16 and PAN, in advance immediately after the end of the fiscal year. · Federal Bureau of Investigation (Public domain, Wikimedia Commons)

05Avoiding double taxation and reporting overseas income — things that change when you become a resident

As seen earlier, if you meet the ‘Resident Residence (ROR)’ requirement under tax law, you will not only receive income within India, but alsoAll income generated worldwide, including KoreaThere is an obligation to report this to the Indian authorities. This means that interest on deposits left in Korea, monthly rent income from rented real estate, and even dividends from stocks held may be subject to this, so expatriates who learn of this for the first time are often quite confused.

fortunatelyKorea-India Double Taxation Avoidance Agreement (DTAA)With this agreement in place, double taxation in India can be substantially alleviated in the form of tax credits on income that has already been taxed in Korea. However, in order to receive the deduction, it is often necessary to submit additional documents such as tax proof of income generation and tax residency certificate, and the application process also differs greatly depending on the individual's income structure.

in indiaProcedure for sending or receiving funds to KoreaSince it is often tied to income reporting details, if you are planning to remit a large amount of money, it is a good idea to check in advance with your tax preparer from the time of reporting.

Old literature related to Indian currency and exchange rates — Declaration of overseas income for expatriates in India — If you meet the residency requirements, income generated in Korea can be converted into Indian rupees and included in reporting. · Jevons, Herbert Stanley, 1875-1955 (Public domain, Wikimedia Commons)

06Practical Tips — Take advantage of company support and consult with experts

Most expatriate companies do not leave individuals to handle income tax issues alone. If you are a large companyTax EqualizationBy operating a system, companies often adjust the tax differences between India and Korea so that expatriates receive a similar amount of actual income as when working in Korea. In addition, there are quite a few companies that prepare ITR reports every year through accounting firms (so-called Big 4, etc.) or local tax agents, so ask your HR or finance person at the beginning of your appointment.Scope of tax support provided by the companyThe first thing to do is to clearly check .

Useful habits in practice

We consistently record the dates of entry and exit from India using passport stamps or airline ticket records, so that they can be presented immediately when determining residency.
PAN Since the card is directly related to bank account and salary processing, it is given top priority immediately after taking office.
Form 16, bank interest certificates, and documents related to overseas income are collected in folders throughout the year.
delivery through companyCorporation establishment·GST registration processIf you understand it together, it will be easier to understand the tax structure even when you earn income in the form of freelance work or consulting.

Income tax is an area where tax rates and deductions change slightly depending on the budget every year, so rather than assuming, ‘It was like this last year, so it will be like this this year,’ the most effective way to save taxes and manage risk is to make it a habit to check the latest information once at the beginning of each fiscal year.

Useful tips

PAN Applications are given top priority immediately after taking office.

Without PAN, you may have taxes withheld from your paycheck at a much higher rate and there will be delays in opening a bank account. You can apply online with just your passport, visa, and proof of address, so apply immediately upon arrival.

Consistently record entry and exit dates from India

Residency determination is based on actual number of days of stay during the fiscal year (April to March). If you organize your passport stamps and airline ticket records in a calendar, you can present them to your accountant immediately at the time of each year's decision.

Check whether the company supports tax equalization

Large-scale dispatch companies often operate a system in which the company adjusts the tax differences between Korea and India. Be sure to clearly confirm the scope of support with your HR and finance staff at the beginning of your appointment.

Store Form 16 in a separate folder as soon as you receive it.

Form 16 is the basic material for ITR reporting. If you receive it around June after the end of the fiscal year and collect it in a dedicated reporting folder along with your bank interest certificate and overseas income data, reporting will be much easier.

Compare the new and old tax systems again at the beginning of each fiscal year

Which of the new or old tax systems is more advantageous depends on the size of your deductions (house rent, insurance premiums, etc.). Don't automatically choose the same scheme every year, but compare with your tax preparer once at the start of the financial year.

Common pitfalls and how to solve them

PAN You receive a salary without paying, only to discover later that much more tax was withheld than expected.

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Upon taking office, PAN applications are processed with the highest priority, and PAN registration is confirmed immediately after application from the company's payroll manager.

They omit to report interest, rent, and dividend income generated in Korea without realizing that they meet the residency (ROR) requirements.

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At the beginning of each fiscal year, recheck your residency type (NR/RNOR/ROR) with your company tax agent and organize your overseas income details for the year in advance.

If you miss the ITR reporting deadline, additional tax or interest will be charged.

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Since the reporting deadline may be adjusted every year according to government announcements, register the relevant year's deadline in advance on the calendar through the official website of the Indian Income Tax Service or through your company's tax agent.

This is income that has already been taxed in Korea, but is taxed again in India due to insufficient documentation for the DTAA tax credit application.

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Prepare the documents necessary for DTAA deduction, such as a Tax Residency Certificate and proof of Korean taxation, in advance of the reporting season, and have the deduction application process confirmed by a professional accountant.

I thought it would be similar to Korea's tax rate structure, so I only roughly estimated the tax, but the difference from the actual reported amount was large.

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India's tax bracket, surcharge, and tax vary depending on the budget every year, so instead of guessing, check the latest tax rate for the year through the official website of the Indian Income Tax Service or your tax agent.

Latest updates

The New Tax Regime is becoming the default option.In recent years, India has been revamping its system to operate a new tax system with fewer deductions but lower tax rates as the default option for salaried income earners. However, there are some individuals who benefit from the old tax system, so the system where they can choose each year is maintained.
Improved convenience of online reporting by upgrading the e-filing portalAs the Indian Income Tax Service's online reporting portal continues to improve, the ITR reporting process for salaried earners is gradually becoming simpler through PAN linkage and pre-filled data functions.

FAQ

How is Indian tax resident determined?

Based on the actual number of days spent in India during the fiscal year (April to March of the following year) and past stay history, they are classified into non-residents (NR), residents but not regular residents (RNOR), and residents (ROR). The exact number of days may vary depending on individual circumstances, so check with your accountant.

PAN Can I get paid in India without a card?

You can receive it, but without PAN, your company will withhold tax at a much higher rate, greatly reducing your actual income. PAN is also required for opening a bank account and various financial transactions, so it is recommended to apply immediately after taking office.

When is the Indian income tax return due?

Based on salary earners, it is generally known to be around the end of July after the end of the fiscal year (March 31), but the government sometimes adjusts or extends the deadline every year, so you should check the official notice for the year.

Do I have to report income earned in Korea to India?

If you meet tax residency (ROR) requirements, you may be required to report your worldwide income, including Korea, to India. However, through the Korea-India Double Taxation Avoidance Agreement (DTAA), you can receive relief such as tax credits for taxes already paid in Korea.

Where and how do I apply for the PAN card?

Apply using the foreigner-only form (Form 49AA) at the online portal of an agency designated by the Income Tax Office, such as Protean eGov (formerly NSDL) or UTIITSL. A copy of your passport/visa, proof of address in India, and a photo are basically required.

References & links

Income Tax Department of India India Income Tax e-Filing Official Portal UTIITSL — PAN card issuing agency Embassy of the Republic of Korea in India (Ministry of Foreign Affairs and Embassy)National Tax Service (Korea, refer to DTAA/foreign income)