Moving back to India with a foreign job: will your salary be taxed here?
I am an NRI who has lived and worked in Canada since 2015. I have returned to India permanently in September 2026 while continuing my Canadian employment, with salary continuing to be credited to my Canadian bank account. Will the salary credited in Canadian bank account become taxable in India after my return?
– Name withheld on request
Since you have returned to India permanently in September 2026, I assume that your stay in India during financial year 2026–27 would likely be more than 182 days. Accordingly, you would qualify as a resident of India under the Income-tax Act, 2025 (ITA).
Whether you would qualify as a Resident and Ordinarily Resident (ROR) or Resident but Not Ordinarily Resident (RNOR) would depend on your past period of stay in India. Given that you have been residing in Canada since 2015, it is further assumed that you would qualify as an RNOR for FY 2026–27.
As an RNOR, you would be taxable in India on income received or deemed to be received in India, or income accruing or arising in India or deemed to accrue or arise in India. Foreign-source income would generally not be taxable in India, except where it is derived from a business controlled in, or a profession set up in, India.
Where salary accrues
Further, under the provisions of the ITA, salary earned by a resident for services rendered in India is treated as income accruing in India.
Accordingly, the salary relating to services rendered before your return to India would not be taxable in India, as the services were rendered outside India and, hence, the salary would accrue outside India. Further, the salary was also received in your Canadian bank account.
However, after your return to India, the salary attributable to services rendered from India would be taxable in India, even if the salary continues to be credited to your Canadian bank account, as the income would accrue in India.
Canadian account
From a foreign exchange law perspective, if you continue your foreign employment after your return to India, the salary can continue to be received outside India and would not be required to be repatriated to India, as the employment was taken up while you were a non-resident.
It should also be noted that the provision of services as an employee of a Canadian company may give rise to permanent establishment exposure for your employer in India. This is a separate tax matter that would need to be evaluated by your employer.
Harshal Bhuta is a partner at P. R. Bhuta & Co. CAs
