Tax ruling boost's transferring UK/NHS pensions to a QROPS in India

In a recent ruling by Honorable high court of Delhi states that employee contributions to overseas pensions were not taxable, provided that the employee is not receiving any benefit currently out of the scheme. The relief applies for the savings made for future retirement.

This can be termed as bonus for expats with QROPS living or working in India . This historic case  between Yoshio Kubo and others against the Commissioner of Income-Tax, resulted in giving clarifications for other tax issues for expats in India.

For example, apart from pension decision including QROPS, the following other rulings also included:

Ø  There should be no tax on employer contributions to overseas social security or private medical insurance

Ø  Tax paid by the employer on rent free accommodation is excluded while working out the value of the

Ø  There should be no tax for Hypothetical tax withheld from expat salaries

Ø  Refunds of tax deducted at source should not be taxed

Ø  paying for expat tax returns by employer is not taxed

It was the issue before the court was whether tax borne by employers for expat employees was a non-monetary perquisite – a benefit that should be taxed – and whether employer contributions to overseas social security was taxable

The ruling of the honorable court is termed as historic & landmarking one in the tax law of India. This ruling has a bearing on expat workers and their employer’s wide range of tax issues in India.

“The judgment confirmed the rules that should be applied on three main issues, namely grossing up benefits, taxing employer contributions to offshore social security and hypothetical tax”

The honorable court also digged at other expats pay issues and gave clear rulings on how benefits are taxed in India. This is a favorable move for expat’s in India since India is one of the largest expat destinations in whole Asia.

This landmark ruling aid’s many british expat workers retirement planning in India as they are not liable to pay taxes on any further contributions into their overseas pension funds(QROPS schemes).

No doubt, this also boosts attracting top talents, high skilled expats to the country helping this fast growing economy to grow further fast.

Please contact me for an informal chat about the transfer scheme, finding right QROPS scheme in India to get your UK pensions transferred and Retirement planning with my following Contact details.

Mr Ravi Kumar. Financial Consultant.  Exide Life Insurance Co Ltd

28, 6^th Floor, Centenary Building,  Adjacent to Raheja Towers, M.G Road, Bangalore-560 001.       

Cell: +91 9980927393,  +91 9844519872

Email:  ravi.sampige@gmail.com