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Everything You Need to Know About Tax Filing in India

One of our clients recently asked us about the documents required for their employees tax filing in India.  This is a common question from many of our clients with employees abroad, and we always explain in detail what is needed, and how to file.  This ensures tax compliance for all employees inside the country, one of more important parts of a foreign assignment.

Tax Filing in India: Form 16 Salary Certificate

The first step after the employer files the annual tax report, is that Form 16 must be given to the employee by June 15th.  This is the salary certificate that lists all information on TDS deductions from the employee’s paycheck.  For the sake of convenience, some employees choose to download their Form 16 from the website of the Income Tax Department once it is ready.

  • Part A of Form 16 has all employment details (name of employer, period of employment, summary of tax deducted quarterly) as well and PAN and TAN information.
  • Part B lists the annual earnings and allowable deductions.

This is all the information the employee needs to file an Indian income tax return, so it is important that is done correctly.

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When do employees have to file the Indian Income Tax Return (ITR)?

All employees, both residents or expats, must file their income tax return by July 31st.  The information from Form 16 should be used to fill out the ITR, and if they had more than one employer in a year, they will need to list the amounts from more than one Form 16.

The good news is that employees can file their ITR online with only the Form 16 information.

How Do We Help Our Clients with Tax Filing in Foreign Countries?

As in this case, our local employer of record takes care of the Indian required tax forms for our clients, so that the employees can file accurate and timely tax forms.  Our account manager at Shield GEO will monitor the local employer to make sure that everything is in compliance and there is no issue with tax filing in India.

Without our service, companies sending employees on assignment have to engage legal and accounting experts in the host country on their own, and then try to oversee the process from home.  This is in addition to setting up a payroll in India DIY, with a local, registered entity.

This can be an administrative burden for most HR departments, which we take care of for our clients from end to end.  Tax compliance is a serious matter for most governments, and a lack of experience or country knowledge will not prevent penalties or fines in case of missed payments, late filings or incorrect forms.  Using our local employer of record prevents all of these potential problems, and allows our clients to focus on the business activity in the country.

Need help managing taxes for your overseas employee? Get in touch!

Considering employing workers in Asia? Read why you should work with us! 

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