I am an Indian citizen who relocated to India during covid after spending around 10 years in the US. I still maintain my US bank and IRA accounts, through which I made certain investments during my time living in the US. In July 2026 I started working for an IT company based in the US. I will be performing all my work remotely from India. Can I avoid paying tax on this salary in India if it is credited to my US bank account?
—Name withheld on request
Assuming that you have been residing in India since the covid period, you will be regarded as resident and ordinarily resident (ROR) in India for 2026–27. As your employment commenced in July 2026, the provisions of the Income Tax Act, 2025, which came into effect from 1 April 2026, will apply while determining the taxability of your salary income in India.
Further, as ROR, you will also be required to disclose your foreign assets in Schedule FA of your Indian income tax return. Along side this disclosure, you will also need to disclose the foreign salary under Schedule FA.
And from the perspective of India’s foreign-exchange law, since you are resident in India, the salary you receive in your US bank account must be realized and repatriated to India within 180 days from the date of receipt. Receiving your salary outside India alone does not allow you to continue holding those funds in your foreign bank account beyond the permitted period.
Harshal Bhuta is a partner at P. R. Bhuta Chartered Accountants.