I want to file the Indian income tax return specifically under UK-India DTAA. Unfortunately the indian income tax problem is computing the tax as zero on income chargeable under DTAA. Form 10F was submitted earlier and Tax Residency certificate attached.
1) Are we supposed to be computing the tax and manually update in Schedule SI row 40 (other source income chargeable under DTAA rates)?
2) If we have to manually update, what is the correct process of computing the tax under UK-India DTAA? Say dividend is 3 lakhs and interest is 14 lakhs. Do we compute tax as (10% on Div 3 lakhs and 15% on Int 14 lakhs) OR use progressive slabs on total income of 17 lakhs with a cap on max tax rate 15% (0 till 4 lakhs, 5% on 4-8 lakhs, 10% on 8-12 lakhs, 15% on 12-16 lakhs, 15% capped on 20% tax rate band (16 - 17 lakhs))?
3) As per UK-India DTAA treaty, the tax on Interest is 15%, Is cess of 4% applicable over and above the 15% tax on interest?
TaxTMI