Non Resident Tax Clause (182 Days)


I am staying in Malaysia from February 2017. I use to work for some company X earlier. During 2017, I had 28% tax deduction with this company and got it refunded when I filed tax for 2017. In 2019 May, I have to exit this company and so I have to go for tax clearance and exited the country after tax clearance and visa cancellation.

Immediately after going to India, I got another offer in Malaysia with company Y and came back in less than 40 days and joined this new company on 28th June 2019. This is a consulting company and they placed me at one of their client place. My Client was unable to extend the contract starting from January 2020. So, my current company conveyed me on December 3rd 2019 that your contract is being terminated. As the notice period is for 1 month from either side, I am their employee till January 3rd 2020.

But before knowing about my contract termination, I planned to go to India on December 20th 2019, I made all the plans. They informed me after I did all my arrangements. I informed about my trip and my duration of stay (i.e., around 4 weeks) in India to my point of contact with my current employer to whom I am reporting to and left to India.

I stayed in India for more time as I don't have any other offer and returned back on January 26th 2020 to Malaysia. I got an offer in India on 5th February and wanted to leave Malaysia. But when I asked for tax clearance, my current employer is saying that you stayed in India for more than 2 weeks and I have to pay flat 28% tax. They didn't resist/inform/alert me about the tax issue when I left to India even though they know that I am going to stay for 3 weeks. Now they wanted to stay here and attend 1 of their client's interview so that I will continue to be their employee and I don't need to pay 28% tax. They are saying that if I get the job with this new client and stay for more than 180 days this year, I need not pay 28% tax for this year and last year as well.

I am confused on this policy and don't have trust on their words as they say anything for their benefit and later change the words easily. So, someone please explain me (or) help me if I really need to pay flat 28% tax, if I do tax clearance now.

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