May 2022

Foreign Retirement Benefit Account – Indian Taxation

Recently, the Government has notified the Rule to address the mismatch in taxing the income accrued on foreign retirement accounts by providing an option to individuals to tax such income on withdrawal/ redemption basis instead of accrual basis.



This Article features the details of the option available to address such tax mismatch and reporting compliance along with key actionables for residents or individuals planning to return to India, who hold IRA(s) in foreign country.  








All individuals who are holding retirement benefit accounts (IRAs) and planning to return to India or have already returned/ posted in India after their employment in foreign countries should start maintaining robust documentation including data of income earned on year on year basis so as to be equipped when such income needs to be offered in India on withdrawal basis.