Elimination of double taxation: reciprocal tax credit and deduction mechanisms govern relief under the India-Korea tax agreement.

Under the India-Korea DTAA, India allows a deduction against Indian tax equal to tax paid in Korea on income taxable under the Agreement, limited to the portion of Indian tax attributable to that income; India may also take exempt income into account when computing tax on remaining income. Korea, subject to its domestic rules, permits a credit for Indian tax paid on income from India, limited to the proportion of Korean tax attributable to that income, with an exclusion for Indian tax tied to profits out of which dividends are paid.

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