The employee, a resident of Karnataka, had relocated to South Korea in 2014 to supervise the construction of a vessel for Ocean Rig UDW Inc., a contractor to Samsung Heavy Industries. His contract fixed a salary in US dollars, which the company wired directly to his NRE account in India.
Bangalore’s Income Tax Assessing Officer issued a notice, arguing that the USD salary credited to the NRE account made the employee a resident‑taxpayer in India and that he had failed to file foreign tax returns or submit a Tax Residency Certificate. The officer added interest income to the taxable base, and the Dispute Resolution Panel upheld the assessment.
On 23 September 2026, the ITAT Bangalore overturned the ruling. The tribunal examined the employee’s passport entries and bank statements, confirming his non‑resident status for the assessment year. It held that merely receiving salary in USD into an Indian bank account does not render the income taxable if the person was a non‑resident.
“Even without foreign tax returns or a TRC, the evidence of passport entries and NRE transfers sufficed to establish non‑resident status,” said Karanjot Singh Khurana, partner at DMD Advocates, in a statement to the Economic Times.
Back home, the employee’s family in Karnataka anxiously awaited the outcome, as the decision lifts a heavy tax burden that threatened to destabilize their finances while he continued to earn abroad.