I currently work in the IT industry and have been paying TDS from my salary (₹18 lakh per annum) at a rate projected for up to the end of this financial year.

But starting November 1, 2015, I am moving to Singapore to take up a new job. The tax in Singapore is calculated based on calendar year and, accordingly, from November-December 2015, there will be zero tax on my earnings. I will be taxed according to Singapore rates from January-March 2016.

Do I need to pay any tax on my earnings in Singapore for the ongoing financial year in India?

Nabeel Moidu

According to the provisions of the Income Tax Act, the taxability of an individual is determined on the basis of his residential status in India during the relevant financial year. Following are the types of residential status and related incidence of taxation: Resident and Ordinarily Resident (ROR) — taxable on global income in India; Resident but not Ordinarily Resident (RNOR) — taxable in India on income sourced from India; income received/deemed to be received in India and any income derived from a business controlled/profession set up in India; non-resident (NR) — taxable in India on income sourced from India and income received/deemed to be received in India. Assuming that you would have stayed in India for more than 181 days during FY 2015-16 and you had not gone abroad prior to November 1, 2015, we understand that you would qualify as ROR during FY 2015-16. Hence, you would be taxable on your worldwide income in India for FY 2015-16 (covering two calendar years of Singapore) including the income that you earn by rendering services in Singapore. The provisions of the Double Taxation Avoidance Agreement between India and Singapore will have to be analysed separately to determine if any benefit is available for the income that is taxed both in India and Singapore.

FY 2015-16 onwards, assuming that you may qualify as NR in India, income sourced from India and income received/deemed to be received in India will be taxed in India.

I have a property that I’ve rented out. There is a home loan against it. I'm looking at raising additional loan for the property in the form of a top-up loan for repairs and renovation. I want to know if the interest component of the top-up loan is tax-deductible (like the home loan interest).

Anshuman

Deduction for interest payable on the home loan can be claimed under the head “Income from house property”. According to the provisions of Section 24 of the Income Tax Act, 1961 (the Act), for let out properties, the interest actually payable during the year can be claimed from the annual rental value of the house property. This is irrespective of whether the loan is to buy the house or renovate the same.

In your case, if you take a top up loan for repairs and renovation, the entire interest, both on the home loan and top up loan for renovation, shall be deductible under the income head “Income from house property”.

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

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