IndiGo & taxes:

[Intruder One]

I've not seen this mention before but I was just sent the terms for IndiGo DEC position.It all looked pretty good till I got to the salary.Basic pay,allowance and other items came to $13,500.I thought ok that's not too bad until I saw final bring home pay after taxes.$9017...Whoa!!! that's some serious tax.I'm surprised no one has mention this before,maybe they have and I just missed it.Looks like a decent contract except for that.Not sure because I have not checked but as a US citizen I think I will still have to pay even more tax on what I send home.


Any thoughts........

[Snowcat]

India and the US have a tax agreement, once you file taxes in India you take that receipt to the US and you shouldnt pay anything in the US.
I am from Canada and it is the same deal, pretty easy, the Indian taxes covered my Canadian taxes. Taxes in India are close to 33 % and it is paid by the airline.

[airplanedriver]

So are the taxes paid by the airline or is it the pilots duty to pay? Is the $13,500 mentioned the final take home pay actually? How about rosters, days off etc?

[Intruder One]

As per the pay sheet I received,your base pay is $13500 then your bring home is $9017.At least its good to know the US will not tax me again but I still think you will have to pay your medicare tax and your social security tax, if not you would have nothing when you retire.


I'm not against taxes but as a foreign pilot that is quite a bit to give to the state of India.I don't imagine for the 4000 plus dollars you are giving you're going to get any benefits from them. At the end you may get a note saying "its been a pleasure doing business with you and you come back anytime"

[Intruder One]

Sorry forgot the days off question......they have two rotation patterns. One is 6 on 2 off or 10 wks on 4 off.Don't know if this changes from time to time but the current terms said either one was available.

[airplanedriver]

Unbelievable!! That's probably the highest tax I've seen by any place, higher than Japan, Singapore etc. It's crazy, but which agency are u going thru?

[Intruder One]

These terms came from Sigma.....I don't think anyone else is recruiting for them

[Wannabe Flyer]

Suggest you get in touch with a tax planner in india. They will be able to better structure your tax outflow. Net effect should be in mid 20's on gross. Social security and mediclaim is yoyr additional perogative in the USA

[Intruder One]

Well I've not applied....a buddy of mine who is new to the contract world has.He just sent me the terms the other day to see what I thought and to see if I may be interested.Tax planner ??? I don't know what good that would do a foreign pilot.If that's what the Indian government takes out I don't know what recourse you would have.I can't see a foreign government giving you any of that back.


With those kind of taxes no I'm not interested. I'm just wondering how they keep anyone, that type of deduction is ridiculous. I was hoping someone working there would chime in and shed some light

[airplanedriver]

I'm not entirely sure that the agency are giving the actual tax component, because from what I've heard from other exps who worked at places like jet and kingfisher didn't pay tax, the tax was paid by the company, yes totally agree if this is the actual tax, then there's absolutely no one that'll even look at this as an option, unless ur jobless

[airplanedriver]

Also any info on the flight patterns they do? Are there many overnight turnarounds and 4 sector days?

[bombayhues]

@airplanedriver: Patterns are base specific. The bigger the base the more the number of patterns. If I am not mistaken IndiGo has only 3-4 overnight turnarounds. You are either home or in a hotel by 11 pm. You can expect 4-5 four sector days every month but again that too is base specific

[vinayak]

bombayhues will have the most accurate info

[Intruder One]

I agree with airplanedriver,no one would do this.There must be some other info than whats on this pay sheet.They must give part of it back to you or something,I can't see anyone paying 4000 plus dollars in tax a month for very long.


Hopefully a pilot there will chime in eventually.

[LouthGirl]

Seems like they are quite desperate. Taxes paid by the airline and there's no assessment.

[highflyer40]

from my calculations that makes the tax 33%. sounds good to me. sounds low actually. I would expect more tax to be taken off. 45% tax here in the uk and many other countries are higher

[Wannabe Flyer]

I have hired ex pats in India in a different field in the past and most times as in the case of many countries in the East the tax is paid or worked out by the company giving the worker a net in hand. The tax planning I talked about earlier with a consultant is basically on how to structure the salary with the employer to ensure which aspects of a salary are tax free or at a lower rate of tax. Indian taxation is not straight line and a lot of deductions are allowed as well as what is called "perks" being paid for by the company who then pays a service tax.

Most companies will have someone within the HR department who will structure your appointment letter based on this as well as the dual taxation treaty with India and your home country.

As said earlier on a salary of US$13,000 expect about a 26% or thereabouts tax deduction of which you will earn entire credit in your home country. If you are a US citizen and your tax bracket ends up being higher then you will have to deposit the differential with the IRS.....

I am sure there are a lot of ex pat pilots who have worked in India who will be able to guide you to the correct person to structure this for you.

[Rotorhead1026]

Usually the contracts state "net of tax"; I haven't seen this before in an Indian contract. However, I've never used a contract agency in India.

The tax rate is about right for India. The operator will send you a Form 16 which denotes the tax paid on your behalf; it'll also be useful for your US taxes. My operator has an accountant that just filed my taxes for last year (FY in India seems to be April through March) for Rs 2000 ~ 33 bucks. If you're being paid through the agency then I don't know the procedure, but documentation of the foreign tax paid is essential. Don't leave home (literally) without it being promised.

IRS will give you a foreign tax credit for your Indian taxes; there are some factors that reduce this slightly, but you can carry forward what you can't use. Note that the gross pay will pump up your AGI, which in many places raises your state income tax liability.

Find a really good CPA to do your US taxes in a situation like this. Don't listen to pilots on internet forums. This includes me. ;)

[Intruder One]

TAXES:
"All payments made to the pilot by the company shall be equivalent Indian Rupees(INR)convertible at the rate prevailing on the due date and shall be subject to withholding of taxes as applicable under the laws of India.The Company shall withhold Indian taxes and make payment to the Indian tax authority on behalf of the pilot"


I found this as well after reading further into the terms.So to agree with some of the above post you do pay over 4000USD in taxes every month and the company takes it out and pays it for you.How nice of them to remove that from your check and help you out like that.
That is jusy crazy,I've never seen a contract deduct that much tax.

[vinayak]

Roster is good. Stable. Flying is for about 90 hours.

Expect a combination of layovers and day returns. Calcutta and Madras are most likely what you might get.

Calcutta has flights to BKK and Madras has flights to DXB and SIN

[Wannabe Flyer]

Intruderone

I think the company is only following the law of the land process of TDS (Tax deducted at source). If I am not mistaken it is the same in the USA where your employer makes all statutory deductions from your pay slip and gives you a summary every week/month and then gives you a form to file end of the year with your taxes. Your applicable tax is based on how you structure your pay with them in consultation with a tax consultant to best suit you.

Much like the USA standard deductions etc are permitted and a very similar tax code. If one is working in a country it is by choice and after full disclosure and it is therefore their duty to obey the laws of the land thereafter which includes paying tax as stipulated.

Considering you are USA based what would your tax and statutory deductions be on a monthly pay of of $13,000 in a similar position?

[hifly787]

Intruder
Wannabe flyer is right . As per GOI tax laws the employer has to deduct tax at source and deposit it with the Govt. But it wont be a 4000 usd loss for you. The Indian companies cleverly have what are called voucher payments like conveyance/layover/meal allowances etc which are tax free which should see you net about 11000 usd . Southern Indian bases like Vomm or Vobg are good . Average flying 75 to 80 hrs . Not a bad choice if you are unemployed.

[Intruder One]

To Wannabe Flyer::


Yes I do understand how tax codes work. In the USA you would pay almost that much tax on that type of salary,but....... and this is the big difference.


In the US I could write off all my expenses, training, travel basically anything that pertains to the job.....so at the end of the year the IRS would give me allot of that back, at least half. As a foreign pilot working in a foreign county I don't think I could file any kind of deductions with them. They are basically just going to keep the entire amount.


As in the US if you are not a citizen and you are here on a contract the IRS is just going to take your money, you cannot file unless you are a citizen, I can't believe its any different in India. The IRS is not going to give me money back on taxes I paid somewhere else.


If this is incorrect I would like to be wrong:

[vinayak]

http://www.irs.gov/pub/irs-trty/india.pdf


also


Double Taxation Agreements with United States of America | Agreements | Law Library | AdvocateKhoj (http://www.advocatekhoj.com/library/agreements/doubletaxation/75.php)



Apologies if this isn't what you meant

[Intruder One]

Thanks.....yes I understand the US will not tax you twice......but is getting any of that 4000 plus dollars in tax you've already paid back possible.I can't see India returning any of that to a foreign worker,maybe they do.


As hifly787 mention somehow the way the company does it you end up with around $11000,if that's the case then that would be ok.The terms I looked over though mention nothing about that.


The friend that sent me the terms has a interview in a few weeks and I'm sure he is going to get a answer on this topic, he thought the taxes did not seem realistic.


I thought a pilot working there would chime in but maybe not.

[Wannabe Flyer]

Intruder one

If you are a foreign employee on a work visa (H1 or L1) in the USA you have to pay all the taxes as a citizen and can avail of all the standard deductions as a citizen. You get back a portion of your taxes and not all your taxes in the USA based on your deductions you make and file at the end of the year. No different and often times get no benefit for your Social security and medicare benefit if you do not convert to a citizen and therefore lose all that.

If you are a foreigner in India on a work visa you have to pay all the taxes of an Indian citizen and you can avail of all the deductions and options available to an Indian Citizen. Difference being that the company structures it for you into your payroll so that you don't have to do the running around end of the year (as described by Hi Flyer787) and therefore instead of getting a refund at the end of the year from the Indian Govt you get a smaller deduction on your pay check every month and therefore more cash in hand. $13000 as per HIflyer will bring you about $11,000 in hand post taxes.... I am assuming the same in the USA or less?

I am sure based on the Double taxation treaty the US will therefore not allow you to claim deductions twice. However if in addition to those expenses you are claiming in India you have more expenses stateside and are eligible for more rebates I am sure you can claim them. The US embassy here is very helpful with guidance on this matter.

AS in my first post I therefore recommend a tax consultant to structure this to ensure you get the best deal.

Many ex pat aviators and workers in India and if you browse the forum I have yet to come across a topic where they have an issue on taxation.....other issues abound but then that is a personal opinion.

[Intruder One]

Ok well it appears this topic has been covered pretty well.....all the info was very helpful and I'm sure it works about the way its been explained or I doubt they would be able to keep any pilots. Those terms from Sigma need to be revised, there is no explanation like has been covered here.


On another topic I understand they have about 9 pilot bases.hifly787 indicated the southern bases were better. Any recommendations....which ones fly the least, quality of life ,things to do etc....