Visa, Personal Income Tax and Remittance to Korea for Individual Entrepreneurs and Expats in India

Essential guide for expats and entrepreneurs in India on FRRO visa extensions, income tax compliance, and remitting salaries to Korea.

Introduction One of the most frequently asked questions from individual entrepreneurs and expatriates in India is regarding the extension of their visa (FRRO) for stable residency and the process of remitting their salaries to Korea . This article provides a Q&A-style guide covering business and employment visas, FRRO extensions, personal income tax, and remittance procedures for individual entrepreneurs and expatriates in India. 1. What Type of Visa is Required to Conduct Business in India? Foreign business professionals entering India typically need either a: ✅ Business Owner Visa (for company directors/shareholders) ✅ Employment Visa (for dispatched employees from a foreign company) Business Owner Visa : Issued to individuals registered as directors or shareholders of an Indian company. Employment Visa : Issued to employees of Korean headquarters after signing an employment contract. ⚠ Important Note: In some cases, company directors without shareholder status (e.g., country heads) may face issues when applying for a Business Owner Visa . In such cases, obtaining an Employment Visa is the safer option to avoid rejection by FRRO. 2. What is the Foreign Regional Registration Office (FRRO)? The FRRO (Foreign Regional Registration Office) is the Indian government agency responsible for foreign resident registration . The Resident Permit (RP) issued by the FRRO is commonly referred to as the FRRO Certificate (e-FRRO) . 💡 Key FRRO Regulations: Foreigners staying in India for more than 180 days per year must register with FRRO within 14 days of arrival . The FRRO Certificate is essential for various legal and financial processes in India. The FRRO is valid for up to one year and must be renewed one month before expiry to continue residing in India without issues. 📌 Reference: Indian FRRO Guidelines 3. How Are FRRO and Personal Income Tax Related? Ensuring FRRO approval is crucial for legal residency in India. The approval criteria differ for Business Owner Visas and Employment Visas : (1) Business Owner Visa FRRO approval depends on the annual revenue of the Indian company. The company’s annual turnover must exceed 2 Crores INR (approx. 320 million KRW) to meet the FRRO requirement. A 2-year grace period is granted to newly established companies, though it varies by industry. Certain industries (restaurants, salons, etc.) face stricter FRRO scrutiny due to India’s policies protecting local small businesses. 👉 Some business owners pay personal income tax to strengthen their FRRO renewal case , but it is not a mandatory requirement for Business Owner Visa holders. (2) Employment Visa FRRO approval depends on whether the expatriate pays personal income tax in India . Expatriates must meet the minimum foreign employee salary requirement of USD 25,000 per year (approx. 1,625,000 INR) . Submitting proof of tax payment (Form 16 or Form 26AS) is essential for FRRO renewal. ✅ Summary: Business Visa FRRO approval is based on company revenue . Employment Visa FRRO approval is based on individual tax compliance . 4. How is Personal Income Tax Calculated in India? In February 2020 , the Indian government introduced revised personal income tax slabs . Taxpayers can choose between the old or new tax structure based on their preference. 📌 Income Tax for Annual Salary of 1,625,000 INR (Old Regime, Below 60 Years) Income Slab (INR) Tax Rate Up to 250,000 0% 250,001 – 500,000 5% 500,001 – 1,000,000 20% Above 1,000,000 30% 📌 Income Tax for Annual Salary of 1,625,000 INR (New Regime, Below 60 Years) Income Slab (INR) Tax Rate Up to 250,000 0% 250,001 – 500,000 5% 500,001 – 750,000 10% 750,001 – 1,000,000 15% 1,000,001 – 1,250,000 20% 1,250,001 – 1,500,000 25% Above 1,500,000 30% 💡 Recommendation: Since income tax calculations depend on salary structure, deductions, and exemptions , consulting an Indian Chartered Accountant (CA) is advised. 5. How and When to Pay Personal Income Tax in India? Employers deduct tax (TDS) from salaries monthly before disbursing salaries. TDS payments must be submitted to the Indian government by the 7th of the following month . Employers collect Form 12BB from employees to determine the correct tax deduction. Employees must file their annual tax return by July each year. 6. Can Expatriates Receive Only Part of Their Salary in India? Under the Double Tax Avoidance Agreement (DTAA) between Korea and India , expatriates must receive their entire salary in India and pay income tax in India. However, some expatriates only receive the minimum required salary in India and receive the remainder in Korea to: Avoid high tax rates in India Reduce currency conversion losses Simplify remittance procedures ⚠ Warning: This approach may cause legal complications. Following DTAA regulations is the safest option . 7. Can Salaries Earned in India be Remitted to Korea? Yes, but only after paying personal income tax in India . To remit salary, employees must submit the following documents to their Indian bank : �