Elimination of double taxation: credit mechanisms allow foreign tax to offset domestic tax under the treaty.

The Convention allows residents of India a credit against Indian tax for Irish tax paid on Irish source income, limited to the proportion of Indian tax attributable to that income. Conversely, Irish residents may credit Indian tax against Irish tax computed on the same profits, income and gains; where an Irish resident company controlling a specified interest receives dividends from an Indian resident company, the credit includes Indian tax on the profits out of which the dividend is paid. A special rule deems 75 per cent of otherwise exempted Indian tax under specified incentive provisions to be Indian tax payable for dividend credit purposes, subject to conditions and a twelve year time limit.

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