@abhi1024 , you have to look at your agreement with your employer. I know for a fact when I was in a similar situation , my US employer used my US income and my foreign income to create a Gross-up and on top the of agreement to keep my hypothetical US taxes the same, created more complex issues. Companies do this all the time. So I would suspect that the your Indian Employer is on correct legal grounds. I would suspect that you are getting paid both in India and the USA. and paying taxes in both India and the USA.
IMHO, they are probably correct -- depends on what the actual agreement calls for. I would not rock the boat without clear understanding of the agreements for the deputation.
Is there more can do for you ?
