Article 25 - Avoidance of double taxation

Avoidance of double taxation: treaty provides reciprocal tax credits and deductions to prevent income from being taxed twice under domestic rules.

Article 25 provides reciprocal relief to avoid double taxation: India allows a deduction against Indian tax for Singapore tax paid on income taxable under the Agreement, including deemed Singapore tax arising from specified reliefs, with a cap tied to the Indian tax attributable to that income; a special dividend rule applies where an Indian resident holds not less than 25 per cent of the Singapore payor. Singapore, subject to its laws on foreign tax credits, allows a credit for Indian tax paid, similarly recognising certain Indian reliefs as constituting Indian tax paid, and income exempt under the Agreement may be taken into account in computing tax rates.