Treatment of Tax deducted in DTA

[deepak gulati]

If some tax has been deducted by contracted state, as per DTA rules, do we get benefit of same in India ? Do we need do declare that Income in India ?

[umesh gulecha]

SECTION 90 OF THE INCOME TAX ACT, 1961 – DOUBLE TAXATION RELIEF – AGREEMENT WITH FOREIGN COUNTRIES – NOTIFIED AGREEMENT

 

NOTIFICATION NO. 91/2008, DATED 28-8-2008

 

In exercise of the powers conferred by sub-section (3) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that where an agreement entered into by the Central Government with the Government of any country outside India for granting relief of tax or as the case may be, avoidance of double taxation, provides that any income of a resident of India "may be taxed" in the other country, such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Income-tax Act, 1961 (43 of 1961), and relief shall be granted in accordance with the method for elimination or avoidance of double taxation provided in such agreement.

AI Summary

Tax Under DTA Rules Must Be Declared in India Per Section 90 of Income Tax Act, 1961 A forum participant inquired about the treatment of tax deducted by a contracting state under Double Taxation Avoidance (DTA) rules, specifically whether such tax benefits apply in India and if the income must be declared in India. The response cited Section 90 of the Income Tax Act, 1961, indicating that income taxed in another country under a DTA agreement must be included in the total income chargeable to tax in India. The relief is granted according to the method outlined in the agreement to avoid or eliminate double taxation.