Now Reading: ITAT rules NRE salary credit alone does not trigger Indian tax
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ITAT rules NRE salary credit alone does not trigger Indian tax
The Bengaluru Income Tax Appellate Tribunal (ITAT) ruled on 23 September that merely receiving foreign salary in an Indian NRE account does not automatically make it taxable in India. In the case…
The Bengaluru Income Tax Appellate Tribunal (ITAT) ruled on 23 September that merely receiving foreign salary in an Indian NRE account does not automatically make it taxable in India. In the case of Santhoshkumar Vithal Akka, who was working in South Korea and earned salary in US dollars, the tribunal found that his non-resident status and foreign employment were supported by his passport and employment documents. The ITAT set aside the tax addition and sent the matter back to the Assessing Officer for fresh consideration, ordering it not to insist on a foreign tax return or tax residency certificate.
Separately, global consulting firm EY has moved the Supreme Court against a June 2026 Delhi High Court ruling. The high court had held that payments by EY India to its US arm for seconded employees were taxable as fees for technical services, not as mere salary reimbursements. EY filed its appeal on 15 September. For the assessment years 2018-19 to 2022-23, the dispute covers about Rs 51 crore in added tax for one year. The Supreme Court has not yet listed the case for hearing.
The rulings clarify that place of work and residential status, not the bank account, determine taxability. NRIs returning to India should note that salary for services rendered in India becomes taxable here, even if credited abroad.
Indian Opinion Analysis
Both livemint articles and barandbench.com offer neutral-report coverage of EY’s cross-border tax dispute and the Bengaluru ITAT ruling. The livemint piece on the ITAT ruling emphasizes the distinction: mere crediting of foreign salary to an NRE account does not determine Indian taxability. Barandbench.com’s coverage of EY’s appeal focuses on the legal specifics of the secondment arrangement. Neither source adopts a pro-government or critical stance. All three provide straight reportage, citing the same key facts: the ITAT’s order of 23 September for the NRE case and EY’s Supreme Court filing of 15 September. The balanced reading is that taxpayers should maintain evidence of foreign employment and residence, while companies must navigate the uncertainty until the Supreme Court rules.
Coverage: 4 sources, 4 neutral
Sources (4): livemint.com (neutral report), livemint.com (2) (neutral report), barandbench.com (neutral report), livemint.com (3) (neutral report)
This brief was synthesised by AI from the 4 sources linked above, so one read covers every framing they carry. Methodology and corrections.
