Good, useful thread. Can I share the experiences of several buddys including one US Captain who did fly for AIEX:
1) Your agency contract if you care to read it says "you are responsible for your own taxation" - I haven't seen it, but I'd give you good odds on it, they all say the same. No matter how many times you read it, it says the same. Balance this against the ads that say "Tax-free salary!!". It is very unusual for an airline to pay your local taxes - not the norm - if they do, good for you, and you can use it to offset against your taxation at home.
2) You are working in India under a visa, FATA and security clearance issued by an Indian airline with an AOC and under your US details and license - there is no place to hide if they come looking for you. If you run off, what's to stop the Indian authorities passing on the information to the IRS?
3) There is a double taxation treaty between most countries and India, including the US. This means that the Indian taxman will not be looking for taxes for 6 months on the basis that you are paying your taxes at home under the treaty, and should not be taxed twice. After 6 months (their definition, not yours), tax is payable FROM DAY 1, plus see point 1. If you think or have been told that taking 2 weeks leave out of India exempts you, or that your theoretical base outside of India exempts you, please see point 1. Try telling the IRS if you're working in the US that you're going on 2 weeks leave or that your home is outside the US and see how they react!
4) Given I haven't a taxed leg to stand on, why can't I ignore all this and sail on regardless getting paid offshore, sure no-one will ever catch up? Fair point, but see points 2 and 3. If you're being paid into an Indian expat account in Rupees, though, be afraid. What happens when you attempt to renew your work visa, though? Depending on where you're from and what embassy you're dealing with (and you have no choice, you must deal with the one at your home or officials in immigration in India), the conversation generally runs "please show me proof of your paying tax in India and I will process it". So, being told by an airline that you need to run off and renew your visa on your own could be the kiss of death, and you need to be prepared.
Equally, if you're with an airline that pays your Indian tax, if you leave before 6 months the tax will not be paid for you and you can't use it to offset - this has also happened in the past.
I hope this helps. You should balance this hard-learned experience against all the horsepoo that you may have been told by various people in and out of India, plus check it to make sure that it's still the current situation.
Last edited by bear11; 2nd Dec 2008 at 12:15.