Financial Daily from THE HINDU group of publications
Sunday, Dec 05, 2004
Financial Daily from THE HINDU group of publications Sunday, Dec 05, 2004 |
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Investment World
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Income Tax Columns - Tax Talk Double taxation of dollar income T. Banusekar
Tax is deducted at source from the salary under the American tax laws. The project will last for six months. Will the amount I receive in dollars be taxable in India? A. Jeyachandran Reply From the facts stated by you, it appears that you are resident and ordinarily resident in India in accordance with the Income-Tax Act. Therefore, all income earned by you anywhere in the world will be chargeable to tax in India. Since the payment made to you is in the nature of salary, the same will not qualify for any tax benefits under the Income-Tax Act and will be fully chargeable to tax in India. You may, however, look into the Double Taxation Avoidance Agreement between India and the US. If by virtue of this agreement the income becomes chargeable to tax in the US, while you are a resident of India in accordance with the agreement, you can claim a relief in India in respect of the tax paid in the US. The relief that will be available will be the lower of the Indian tax or the American tax on such doubly taxed income.
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