Air India / Rishworth

[BBJGuy]

Hiya,
Anybody on here doing the Air India 737 contract thru Rishworth?
What's the process following the screening? Rishworth briefing doc states a 3-4 week initial course plus sim, but I see several threads on here regarding 3+ months waiting for visas under the current political situation, is that actually happening? Is RAL covering salary and hotel during that wait?
Anyone having commuting problems with the 2 weeks off travel?
Has anyone moved there (housing allowance) rather than do the hotel thing forever? How's the quality of life in either case?
Thanks for the info,
BBJG

[Boomerang1]

Unless things have changed at Air India Express you will not be invited for screening until you have the DGCA approval and the work visa. They expect you to start training as soon as you have been accepted. BTW all the contractors have the same terms from Air India.

The major problem with the Air India contracts is that you are responsible for your own taxes. If you stay in India as a resident you will have to pay the India taxes. The rate is 33%. With the taxes taken into account this is likely one of the lowest paying 737 jobs out there. But of course there are very few jobs available anywhere at the moment.

[BBJGuy]

+++The major problem with the Air India contracts is that you are responsible for your own taxes. If you stay in India as a resident you will have to pay the India taxes. The rate is 33%. With the taxes taken into account this is likely one of the lowest paying 737 jobs out there. But of course there are very few jobs available anywhere at the moment.+++

Thanks Boomerang. Just another question here, the way I'm reading this is that if I just do the hotel thing on Rishworth and get out of the country during the 2 weeks every other month, then there'll be no tax liability in India. Is that correct?
I've done the online search trying to find details on the tax liability there, but not really coming up with anything yet.

[Boomerang1]

The tax thing with Air India is kind of a grey area. If you ask Air India they will tell you that if you don't live in the country for more than 6 months you will owe no taxes to India. They have also that said that because they don't hire and pay pilots in India (that is why they only deal with contracts companies outside of India) that they owe no Indian taxes. If you get the drift, Air India only cares if they have to pay taxes, they don't care what the liability is for the pilots.

You will still likely have to pay taxes to your home country in any case. If the company you work for pays the taxes in country of employment you can use that as a tax credit for US taxes. (don't know what the tax rules are for other countries)

Here is all the information on India Taxes Laws 4 India - India Tax Laws (http://www.laws4india.com/itl.asp)

[Geebz]

Hi Boomerang,

I met you in security in DXB when you brought in that BBJ on delivery.
I was interviewing for a corporate gig there.

Anyway, the tax situation is workable. Sure AIE doesn't pay the taxes but if you stay out of the US for 330 days per year then you can take the $87000 exemption (still have topay FICA though). So you could get a cheap pad in Thailand, for example, and commute therea few times a year then to your home in the States the rest of the time to ensure your out of the US for that 330 days. Not all that appealing but in today's market it's at least an option to maximizing your take home cash.

Alternatively, you can take the IRS ME&I writeoff to offset any taxes. I don't know what it is in India but when I worked in Kuwait it was $390/ day there. Even if it's only half that amount you're still getting another $6-7000 per month writeoff.

[Rotorhead1026]

still have topay FICA though

Offshore salary paid by an offshore employer is not subject to FICA. As Yogi would say, "You could look it up".

Persons Employed by a Foreign Employer (http://www.irs.gov/businesses/small/international/article/0,,id=105251,00.html)

Social Security Online - The Official Website of the U.S. Social Security Administration (http://www.ssa.gov/)


Now that may not be your case depending on your agent and how you are paid. I'm not using an agent and am paid directly by my airline. Best advice is to get a tax advisor. I wish I could give you guidance on Indian taxes, but I neither know nor "dare". My employer pays mine and gives me a statement of same. It looks like AI is setting you up to be "twisting in the wind". Be careful ... :eek:

[bear11]

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.

[Rotorhead1026]

1) Your agency contract if you care to read it says "you are responsible for your own taxation"

Actually, mine doesn't - it specifies pay after Indian tax. AI and Express (which are government owned, FWIW) apparently do have the clause above. Most of the others are supposed to be paying your tax. You need to get a "Form 16" (Indian) in March to verify this for the past year. There have been threads regarding controversies regarding whether these payments are being made, but I wasn't working for the outfits mentioned. Personally I would just plan on paying Uncle or India - just get documentation of one or the other. Most operations will pay your salary into any bank account that will accept the funds. It's not good to get paid into an Indian account - too hard to get to the money. Ultimately, everybody is responsible for his own taxes - with a Form 16 you're in pretty good shape. AI isn't paying the tax. You need to either verify your exemption or pay the tax. Period.

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!

It's actually possible that it does exempt you, especially if you're based in, say, AMS and just doing RON's. I just don't know, and in any case you might be liable for tax wherever you ARE based (Belgium). The US tax laws are far more encompassing regarding foreign income; most countries don't tax that stuff. Hiding income from Uncle is really stupid, btw. Pay India and take the US credit; if you're sure you're exempt then pay Uncle. Otherwise you'll be looking over your shoulder forever. The 330 day exclusion is good. Don't miss it by a single day.

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.


Actually I renewed my visa on my own. Nobody asked about taxes.

I'm not saying anybody is right or wrong, but apparently there's a lot of information out there that's in conflict with my own experience. I am saying that the AI contract is a can of worms. Get an expert (actually at least two - one Indian and one American). Personally I wouldn't touch it. You can do better. :)

[ClearedToCrush]

Hiiiiii.I looked in Rishworth's website,i couldnt find any 737 FO scheme for Air India.Maybe its an old one?What are the requirements?

[Boomerang1]

Hi Geebz,

Good to hear from you again. So did you take a job in India?

There is one other way to get an exemption from US taxes besides using the 330 rule. You must set a tax residence outside the US for a minimum of 12 months. There is no resriction on how many days you can be in the US or how many days you stay in your tax residence. You must declare and pay the taxes in the place of residence. Best to declare residence in a place with little or no taxes.

You can find the details here.
Foreign Earned Income Exclusion - Bona Fide Residence Test (http://www.irs.gov/businesses/small/international/article/0,,id=96960,00.html)

[Boomerang1]

India does not allow for hiring F/O's any longer. They have enough pilots with experience as F/O's and the goverment will only give permission for hiring expat Captains.

[NGFellow]

The 12 months required for bonafide residence must encompass an entire tax year. i.e from January-December. You can't use that rule if you start a job overseas midyear.

[niss]

RNOR = Resident but Not Ordinarily Resident.

The Indian tax year runs from April to March. Assume that you land up in India in December, '08. That would relate to the tax year April '08 to March '09. (April '08 to March '09 or 2008-09 is referred to as the "previous year" and - as an aside- "assessment year" is the year immediately following the previous year).

In the previous year 2008-09, you would be an RNOR if :
(a) You have been a non-resident in India in 9 out of the 10 previous years preceding 2008-09 or
(b) You have been in India for a period of (or periods amounting in all to) 729 days or less during the 7 years preceding 2008-09.

If any of the above two tests are met, you are an RNOR and then, all of your following income would be taxed in India :
(i) Income received/deemed to be received in India in 2008-09.
(ii) Income which accrues/arises or is deemed to accrue/arise to you in India in 2008-09.

Any income which accrues/arises to you outside India would not be taxable in India unless it is derived from a business controlled in or a profession set up in India.

I also found this: http://www.seda-cog.org/export/lib/export/india_briefing_july_2007.pdf
As far as I can read, you have to pay tax in India