Foreign tax credit allowed against Indian tax for tax paid abroad, governed by treaty or limited by comparative tax rates.

An assessee may claim a foreign tax credit against Indian income-tax for tax paid abroad on income accruing outside India; if a treaty applies the Agreement governs the credit, otherwise the credit is limited by reference to the lower of Indian or foreign tax rates (or the Indian rate if equal). Credit is disallowed where the income is deemed to accrue in India and no treaty applies. The Central Government may prescribe computation methods, claim procedures, and other particulars to relieve or avoid double taxation.

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