Salary & Employment

Working remotely from India for a foreign employer

Where you sit decides the tax, not where your employer is. Work from India and that salary is Indian-source.

You are an NRI, or you work for a foreign employer, and you spend a stretch working remotely from India, a long visit, a workation, caring for family. You are paid into a foreign account by a foreign company, so it feels like nothing to do with India. It is not that simple. The salary for the days you actually work from India is Indian-source and taxable here, and if you stay too long you can become a resident and expose all your income. Here is the trap and how a treaty can help.

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Last reviewed: 26 July 20266 min readBy Vipul Sharma, Founder · Reviewed by Preetesh Maloo, CA

The short answer

The tax follows where you do the work, not where your employer sits or where you are paid. Under the source rule, salary for services rendered in India is Indian-source income, so if you physically work from India, even remotely for a foreign employer who pays you into a foreign account, the salary for those India-worked days is taxable in India. The employer's location and the place of payment are irrelevant. Two further risks. As a visiting Indian citizen or person of Indian origin you become resident at 182 days in India, or at 120 days if your Indian income, including the India-worked salary, is over ₹15 lakh and you spent 365 days in India over the previous four years. If that makes you an ordinary resident, your global income is exposed, not just the India-worked salary. And your working from India can create a permanent establishment problem for your foreign employer. A tax treaty can exempt the employment income, but only if you are tax resident in the other treaty country, hold its tax residency certificate and file Form 10F (Form 41 from 1 April 2026), and all three conditions hold: you are present 183 days or fewer, your employer is not resident in India, and the cost is not borne by a permanent establishment in India. Miss any one and India can tax it.

Working remotely from India for a foreign employer?

Tell us your days and your contract. A practising CA will fix what India can tax and the treaty relief on a free call, no obligation.

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Related situations

Where you work decides the tax

It is natural to think that a foreign salary, paid by a foreign company into a foreign account, has nothing to do with Indian tax. But the Indian rule looks at where the work is done, not where the money comes from. Under Section 9(1)(ii), salary for services rendered in India is treated as income earned in India under the Explanation to that clause, with nothing turning on where the employer is or where the salary is paid. So when you sit in India and work, even remotely, even for a company with no Indian presence, the salary for those India-worked days is Indian-source and taxable here.

This is the trap in the modern workation: people assume that keeping the job, the employer and the bank account abroad keeps the tax abroad too. It does not. The physical fact of working from India is what brings that portion of your salary into the Indian net. And it stacks with a second risk. If your stay is long enough that you become an ordinary resident, discussed on our day-counting page, the exposure is no longer limited to the India-worked salary, your entire global income can become taxable in India. Even then, if you are Resident but Not Ordinarily Resident, which is automatic when the 120-day rule or the deemed-resident rule is what makes you resident, India taxes your Indian income and income received in India, not foreign income earned and received abroad. Only an ordinary resident is taxed on global income.

The treaty relief, and the employer's risk

A tax treaty can rescue you, but only within tight limits. The employment article, usually Article 15, called dependent personal services and numbered Article 16 in some of India's older treaties, gives a short-stay exemption: India cannot tax your employment income for that short stay if you are a tax resident of the other treaty country, with its tax residency certificate and Form 10F (Form 41 from 1 April 2026), and three conditions are all met. You are present in India for 183 days or fewer, your employer is not a resident of India, and your salary cost is not borne by a permanent establishment your employer has in India. All three have to hold together, so if any one fails, for example your stay tips over 183 days, the exemption goes and India can tax the India-worked salary. The day count and the exact window are treaty-specific, so the precise test depends on your country.

There is a further consequence you should know about, even though it is your employer's problem more than yours: an employee habitually working from India can create a permanent establishment, or a place-of-effective-management issue, for the foreign company, which can drag the employer into Indian tax. That is covered on our separate page on running a foreign company from India. A practising CA works out how much of your salary is taxable in India, whether the treaty exemption is available, and how to keep both your residency and your employer's exposure in check.

What's involved

What the CA actually does

1
We split your salary
We work out how much of your salary relates to days worked in India and is therefore taxable here.
2
We test the treaty
We check whether the short-stay exemption applies, in which case the India-worked salary may fall outside Indian tax.
3
We watch your residency
We track your days so you do not accidentally become resident and expose your global income.
4
We flag the employer risk
We warn where your working from India could create a permanent establishment problem for your employer.

What to have ready

Documents you'll typically need

The days you spent working from India
Your employment contract and who your employer is
Where your salary is paid and in what currency
Your passport and residency details

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next, how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 52 countries.

References on this page

Salary for services rendered in India is Indian-source (Section 9(1)(ii)), so working from India for a foreign employer paid abroad is taxable in India for those days
The employer's location and the place of payment are irrelevant; where you do the work decides it
A visiting citizen or PIO becomes resident at 182 days, or at 120 days if Indian income tops ₹15 lakh and 365 days were spent in India over the previous four years; only an ordinary resident is taxed on global income
A treaty exempts the salary only for a tax resident of the other country with a TRC and Form 10F (Form 41 from 1 April 2026), and only if all three hold: present 183 days or fewer, employer not resident in India, cost not borne by a PE in India

Frequently asked questions

Common questions

The salary for the days you actually work from India is, yes. Under the source rule, salary for services rendered in India is Indian-source, regardless of where the employer is or where you are paid. Where you do the work decides it, not the bank account.

It can, if you are tax resident in the other treaty country, hold its tax residency certificate and file Form 10F (Form 41 from 1 April 2026), and all three conditions hold: you are present in India for 183 days or fewer, your employer is not resident in India, and the cost is not borne by a permanent establishment in India. Miss any one, for example by staying too long, and India can tax the India-worked salary.

Then a second risk kicks in. As a visiting Indian citizen or person of Indian origin you become resident if you are in India 182 days or more. That limit drops to 120 days if your Indian income, which includes the salary for days worked here, is over ₹15 lakh and you spent 365 days or more in India over the previous four years. A citizen with Indian income over ₹15 lakh who is not liable to tax in any other country can also be deemed resident. Even then, if you are Resident but Not Ordinarily Resident, which is automatic when the 120-day rule or the deemed-resident rule is what makes you resident, India taxes your Indian income and income received in India, not foreign income earned and received abroad. Only an ordinary resident is taxed on global income. Watch your days and your Indian income.

Yes, potentially. An employee habitually working from India can create a permanent establishment or a place-of-effective-management issue for the foreign employer, which can bring the employer into Indian tax. It is worth flagging to them early.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

Primary residence test: days in India

Right now: 182 days

Where it works differently

The person is an Indian citizen leaving India for employment abroad, or as a crew member of an Indian ship: Only the 182-day test applies. The 60-day secondary test is disabled.; Explanation 1(a) to s.6(1)
Counting days: The day of arrival AND the day of departure both count as days in India.; Settled administrative practice; partial days count as whole days.
The financial year straddles a move: Residence is decided for the WHOLE financial year, not from the date of the move. India has no split-year concept, unlike the UK.; s.6 is a full-year test.

Commonly got wrong

You become an NRI the day you leave India. True for FEMA, false for income tax. Under FEMA residence changes on departure with intent; under the Income-tax Act it is a full-year day count.Name which law you mean. Say 'non-resident under FEMA from the day you leave' or 'non-resident for income tax if you are in India under 182 days in that financial year'.
India has split-year treatment. It does not. Only the treaty tie-breaker resolves a dual-residence year.Point to Article 4 of the relevant DTAA.

Deemed residence: Indian income threshold

Right now: Rs 15 lakh

Where it works differently

The person is liable to tax in any other country: s.6(1A) does not apply at all.; The provision targets stateless-for-tax individuals only.
s.6(1A) applies: The person is RNOR, not ordinarily resident. Foreign income is not taxed in India.; s.6(6)(d).

Commonly got wrong

Gulf NRIs earning over Rs 15 lakh in India become fully taxable on worldwide income. They become RNOR, so foreign income remains outside the Indian net.Say 'deemed resident but RNOR, Indian income only'.

If this matched your situation, these go further

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