Search Results For: double taxation


QUERY: A Ltd. appoints a commission agent in UK for getting export orders for garments. The commission agent does not have any office in India and has produced a tax residency certificate. The commission agent does not have a PAN. Whether by virtue of section 206AA tax has to be deducted even though under the Double Taxation Avoidance Agreement the business profits are not taxable in the absence of a permanent establishment in India.
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The Supreme Court in GE India Technology Centre Pvt. Ltd. [327 ITR 456] has held as under:

“The most important expression in section 195(1) of the Income-tax Act, 1961 dealing with deduction of tax at source consists of the words “chargeable under the provisions of the Act”. A person paying interest on any other sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the Act. Section 195 contemplates not merely amounts,

QUERY: 1. Can section 206AA (higher TDS in case of non furnishing of PAN by payee) be taken as overriding the provisions of DTAA?
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Section 206AA of the Income-tax Act, 1961, reads as under:

“(1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee)

QUERY: The Finance Act, 2012 with effect from the 1st day of April, 2013, has inserted section 90(4) which provides that a non-resident assessee shall not be entitled to claim relief under the applicable Double Taxation Avoidance Agreement unless a TRC from the Government of the contracting State of which he is a resident, containing the prescribed particulars, is submitted.

Issues:

(a) The Finance Act state that the provision “shall be inserted with effect from the 1st day of April, 2013 which means the provision is applicable from April 1, 2013 i.e. assessment year 2013/14 or 2014/15? As the Notes to clauses and Memorandum to the Finance Bill, 2012 states that the Amendment will take effect from 1st April 2013 and will accordingly apply in relation to assessment year 2013-14 and subsequent years. Please clarify.

(b) Since the format/particulars has not yet been prescribed, whether A Ltd should insist on general TRC from Tax Authorities of the country in which the Foreign Company / NRI is tax resident to prove A Ltd.’s bona fide and substantially start implementing the machinery provision of TDS considering the intent and the spirit of the provision of section 90A?

(c) In the event the Foreign company / NRI, fails to provide the TRC, which rate should be applied?
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(a) Section 90(4) is applicable from assessment year 2013/14 as explained in Memorandum to the Finance Bill 2013/14 to the Finance Bill, 2012. The Supreme Court consisting of five judges in Karimtharuri

QUERY: Mr. X moved to UK in 2001 to work as a doctor in a reputed hospital over there. However, he again moved back to India in 2010. He bought a property in the UK which he had purchased from own funds which he saved while being in India and now he wants to sell it off. The money will be transferred to his Indian bank account. What taxes do Mr. X need to pay?
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Mr. X was in UK from 2001 to 2010. Thereafter he moved to India. So far the fi-nancial year 2013/14 he was in India for more than 182 days. So as per S. 6 of the Income-tax Act, 1961 he is resident in India.

QUERY: While withholding tax as per the rate specified under DTAA, whether surcharge and education cess is applicable?
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The Supreme Court in CIT v. K. Srinivasan [83 ITR 346] held that the expression “income tax” used in the Finance Act and the Income-tax Act includes surcharge whenever provided in the Act. The surcharge,

QUERY: Ajay was seconded to US for 11 months by his company to work in its parent company while being on Indian company payroll. As per US do-mestic tax laws, Ajay was advised to offer his US sourced income which is nothing but his 11 months salary received in India while being in US. However since the salary was being paid in India, the TDS u/s. 192 was accordingly deducted while remitting the salary to Ajay in his Indian bank account. Now Ajay (since qualifying as a Non-resident) wants to know instead of claiming the exclusion as per Article 16(1) as prescribed in Indo-US DTAA in his return of income, can the same be claimed in his Form 16 itself?
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As Ajay was seconded to USA for 11 months by his company to work in its parent company, while being on India company’s payroll, he does not become a non-resident as per section 6(1)(c) of the Income-tax Act, 1961.

QUERY: Is the notice pay compensation taxable in the hands of employer? If yes, it would amount to double taxation i.e. once when salary was paid by the employer who had deducted the tax at source under section 192 of the Act, and again when he receives a notice pay compensation from employee?
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Generally, a notice pay compensation is deducted by the employer before releasing any amount of gratuity or any other sum, the employer deduct the tax at source under section 192 of the Act. Hence, there is no double taxation.