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Special Income

The 2-year teaching exemption in India's tax treaties, and how it works both ways

You are an academic crossing a border to teach or research, and someone mentioned a treaty exemption for a couple of years that you are not sure applies to you.

You are a professor or researcher moving across a border to teach, either an Indian academic taking a post abroad or a foreign or OCI academic invited to teach in India. You have heard that a tax treaty exempts a visiting teacher's pay for up to two years, and you want to know whether it applies to you, for how long, and what India's side of it is. The answer depends on which treaty and which direction, because the article number, the two-year limit and even whether the exemption exists at all change from country to country. Working out the India position and claiming it correctly is India-side work.
Last reviewed: 4 August 20268 min readReviewed by Preetesh Maloo, CA

The short answer

Many of India's tax treaties have a professors-and-teachers article that exempts the remuneration of someone who visits the other country to teach or do research at a recognised institution, for a period not exceeding two years, provided they were a resident of the first country immediately before the visit. But it is not uniform. In the India-US treaty it is Article 22 (two years); in the India-UK treaty it is also Article 22 (two years); in the India-Australia treaty it is Article 20 (two years); and the India-Canada treaty has no professors article at all, so a visiting academic there gets no such exemption. Two traps matter: the exemption is generally read as lost for the whole period if you stay beyond two years, and research qualifies only if it is in the public interest, not primarily for a private party. India-side, the work is to fix your residential status, claim the exemption on the Indian return where it applies (for an academic teaching in India, or where India still has a claim on foreign teaching pay), and make sure the two-year clock and the disclosure are handled.

References on this page

  • India-US DTAA Article 22: professors, teachers and research scholars; exemption for a period not exceeding two years
  • India-UK DTAA Article 22 (Teachers): two years; India-Australia DTAA Article 20 (Professors and teachers): two years
  • India-Canada DTAA: no professors / teachers article (no equivalent exemption)
  • Section 6: residential status decides whether India taxes an Indian academic's foreign teaching remuneration

What the professors-and-teachers article does

The article rewards a genuinely temporary academic visit. Where it applies, an individual who was a resident of one country immediately before visiting the other, and who visits to teach or carry out research at a recognised university, college or educational institution, is exempt on that teaching or research remuneration for a period not exceeding two years from the date of first arrival.

It works in both directions. An Indian professor who takes a two-year post abroad can be exempt in the host country on the teaching pay. A foreign or OCI professor invited to teach in India can be exempt in India on the Indian teaching pay for up to two years, claimed on the Indian return. The exemption is specific to teaching and qualifying research income, not to other income the person may have, and research qualifies only if it is undertaken in the public interest rather than primarily for the private benefit of a particular person.

The article number and the exemption are not the same in every treaty

This is where people go wrong by copying an answer from a different country. The professors article is not standardised. In the India-US treaty it is Article 22, in the India-UK treaty it is also Article 22, and in the India-Australia treaty it is Article 20, each giving a two-year exemption. The India-Canada treaty has no professors or teachers article at all, so a visiting academic in Canada falls back on the ordinary employment or independent-services rules and gets no two-year teaching exemption.

So the first thing to pin down is the exact treaty and its article, because assuming Article 22 everywhere, or assuming the exemption exists everywhere, produces a wrong position. The safe approach is to read the specific treaty for your country before relying on any exemption, which is part of what a CA does when setting up the claim.

The two-year clock and the traps that void it

The two-year limit is stricter than it looks. The exemption is for a visit not exceeding two years, and the widely applied interpretation is that if you stay beyond two years, the exemption is lost for the entire period, not just the extra time, so the first two years' pay can become taxable in hindsight. That makes an overstay expensive, and it is the single most important thing to plan around.

There are two more limits worth knowing. Research only qualifies where it is in the public interest, so research done primarily for a private party is outside the article. And the exemption is a treaty position that has to be claimed properly, with a tax residency certificate and the treaty relied on, not simply assumed. For a foreign or OCI professor teaching in India, all of this lands on the Indian return, which is squarely India-side.

A worked example: Dr. Menon teaches for a year in India

Dr. Menon, an OCI who lives and teaches in the United States, is invited to teach for a year at an Indian university on teaching pay of about 24 lakh rupees. He was a US resident immediately before arriving and the post is at a recognised institution, so under Article 22 of the India-US treaty that 24 lakh can be exempt in India, because the exemption runs for up to two years.

His CA fixes his residential status for the year, confirms the visit qualifies, and claims the Article 22 exemption on his Indian return, supported by his US tax residency certificate. Because his stay is well within two years and the work is teaching, the exemption holds and India does not tax the teaching pay. Had he been going to Canada instead, there would be no such article and no exemption, and had he planned to stay a third year, the exemption could have been lost for the whole period. The India-side claim, the residency call and the two-year planning are what we handle.

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What's involved

What the CA actually does

  1. 1

    We read the right treaty for your country

    We identify the exact professors-and-teachers article for your treaty, or confirm there is none, so the position is built on the actual article number and limit rather than a copied assumption.

  2. 2

    We fix your residential status and India's claim

    We determine your residential status and whether India taxes the teaching remuneration at all, which decides whether the exemption is even needed on the Indian side.

  3. 3

    We claim the exemption on the Indian return

    For a foreign or OCI academic teaching in India, we claim the treaty exemption on the Indian return with the tax residency certificate and Form 10F, so the teaching pay is exempted correctly rather than taxed and argued later.

  4. 4

    We plan the two-year clock

    We flag the date the two-year window ends and the overstay trap that can void the whole exemption, so a planned extension is a deliberate decision, not an accidental tax bill.

What to have ready

Documents you'll typically need

  • Your appointment or invitation letter and the institution
  • Your date of first arrival and planned duration
  • Your residency the year before the visit (for the immediately-before test)
  • Tax residency certificate from your home country
  • PAN and the teaching remuneration details

Frequently asked questions

Common questions

Crossing a border to teach or research?

Tell us the country and the institution. A practising CA will find the right treaty article, claim the exemption where it applies, and plan the two-year window. Free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.