Never trust a foreigner – sort of, well, ugh, wait a second!

In India, a foreigner has to renew his working visa annually. Reasonable (except for the process of doing so, but that’s another story). And in India, a foreigner has to pay taxes annually as well. Also reasonable (except for the amount one pays and what he gets out of it in return, but that’s again another story). But when you combine the 2, it gets interesting:

Let’s say your annual visa renewal is due in March. Tax payment needs to happen until somewhere in July. Now, if you apply for a visa in March of one year, the authorities will put a remark into the visa saying that by July you need to get a stamp on the visa proofing that you paid taxes, otherwise you’re not allowed to leave the country come late July. Maybe reasonable (except that I haven’t seen this in any other country I lived so far…). Hmm, me thinks — if I wanted to escape India without paying taxes, would I do so in July or August?

And then, eventually the inevitable moment comes and the diligenty tax-paying expat leaves India for good. Which is unlikely to happen by the time the government declared end of tax-year, I.e. July. But, let’s say the unsuspecting expat leaves in April. Then India lets the foreigner go without any proof since he can’t pay tax yet according to the Indian schedule. Instead, as it seems, India expects the guy to pay taxes once the Indian authorities declare tax-payment season, which is July. When the foreigner is far, far away. Hmm.

Finally, add a bit of (Indian) spice to the equation: Indian banks are only allowed to keep accounts for foreigners as long as they possess a valid visa. And visas are tied to actual employment contracts. In other words, once the foreigner’s employment contract ends, he leaves the country. Obviously. At the same time, his visa ends. And, at the same time, his Indian bank account seizes to exist. Now, back to the original topic, some time later he should pay taxes. By transfering money from his (aha!) Indian bank account to the tax authorities. Hmm, hmm, hmm…

Did any Indian authority ever think this whole thing through? I’m wondering how many expats “evade” taxes in their final year of (partially) being in India. Not out of intention but, well, #OnlyInIndia

I’m planning to leave India in November, btw. And I’m trying to adhere to all regulations. To my best. Let’s see how that works out…

Advertisements