As Per Article 25 of DTAA specifies as follows: ( with considering this i think that resident of singapore (Linkedin) may allowed to claim credit of tds deducted in India @10% as per article 12 of DTAA - Please kindly Confirm)
''Subject to the provisions of the laws of Singapore regarding the allowance as a credit against Singapore tax of tax paid in any country other than Singapore, Indian tax paid, whether directly or by deduction, in respect of income from sources within India shall be allowed as a credit against Singapore tax payable in respect of that income. Where such income is a dividend paid by a company which is a resident of India to a resident of Singapore which owns not less than 25 per cent of the share capital of the company paying the dividends, the credit shall take into account Indian tax paid in respect of its profits by the company paying the dividends.''
5. For the purposes of paragraph 4 of this Article the term "Indian tax paid" shall be deemed to include any amount of tax which would have been payable in India but for a deduction allowed in computing the taxable income or an exemption or reduction of tax granted for that year in question :
(a) Sections 10(4), 10(4B), 10(5B), 10(15)(iv), 10A, 10B, 33AB, 80-I and 80-IA, insofar as these provisions were in force and have not been modified since the date of signature of this Agreement, or have been modified only in minor respects so as not to affect their general character, (b) any other provision which may subsequently be enacted granting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character to a provision referred to in sub-paragraph (a) of this paragraph, if such provision has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.
06 July 2024
Based on the provisions of Article 25 of the Double Taxation Avoidance Agreement (DTAA) between India and Singapore, here’s a clarification regarding the credit of TDS (Tax Deducted at Source) deducted in India for a resident of Singapore:
1. **Allowance of Credit**: Article 25 of the DTAA allows residents of Singapore to claim credit for Indian tax paid, whether directly or by deduction, in respect of income from sources within India. This means if you are a resident of Singapore and income sourced from India has had TDS deducted at a rate of 10%, you are generally eligible to claim this TDS as a credit against the tax payable in Singapore on that income.
2. **Specific Conditions for Dividends**: For dividends paid by an Indian company to a resident of Singapore who owns not less than 25% of the share capital of the Indian company paying the dividends, the credit shall consider Indian tax paid in respect of the profits by the Indian company paying the dividends.
3. **Definition of "Indian Tax Paid"**: The term "Indian tax paid" includes any amount of tax which would have been payable in India but for a deduction allowed in computing the taxable income or an exemption or reduction of tax granted for that year. This encompasses various provisions listed under Section 10 and other sections of the Indian Income Tax Act that provide for exemptions or reductions.
Therefore, based on the DTAA between India and Singapore and the specific provisions mentioned:
- Yes, as a resident of Singapore, you may claim credit for TDS deducted in India at the rate of 10% under Article 25 of the DTAA. - The credit can be claimed against the Singapore tax payable on income sourced from India. - Ensure compliance with both Indian and Singapore tax laws and consider consulting a tax advisor to optimize your tax position and ensure proper documentation for claiming the tax credit.
If you have specific details or need further clarification based on your individual circumstances, it’s advisable to consult with a tax professional who can provide tailored advice.
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