Avoidance of double taxation permits a tax credit for foreign tax paid and allows exempt income in rate calculations.

India relieves double taxation by allowing a deduction from Indian tax equal to income-tax or capital tax paid in Mongolia, limited to the part of Indian tax attributable to income or capital taxable in Mongolia; Mongolia applies an identical method. Taxes to be included for relief purposes include those reduced by tax incentives, and income exempt under the Agreement may be taken into account when calculating tax rates in a Contracting State.

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