Dtaa

This query is : Open

sanath (Querist)
Follow

06 August 2011 Hi,

Mr.Prasad estimates his earning as follows. Pls advice on the tax implications

For the year 2011-12

Salaried Income from a UK Company - 23000 Pounds

Tax Paid - 3,105 Pounds
National Insurance - 1,893 Pounds

Salary In India

Rs.36,000 per month.

Assuming he has no other deductions from his income, kindly share the computations of tax and relief thereto :-

1) When he is resident
2) When he is a non residet.

Thank You

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
Follow

07 August 2011 The answer shall depend on place where the services were rendered.

sanath

sanath (Querist)
Follow

07 August 2011 Right,
He is a salaried employee for the UK Company and hence his salary from the source.

Second, he is a director in the Indian company and hence Directorial remuneration for the Indian Company.

Thank You

Upgrade to CAclubindia Pro. Subscribe Now!

sanath

sanath (Querist)
Follow

07 August 2011 To be more specific Mr.Anuj,
He renders his services in UK, hence his UK income.

In lieu of being a director of the Indian Co, he gets a remuneration in India.

Hope this clarifies your quer.

Thank you

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
Follow

07 August 2011 In the situation brought on record by Mr. Sanath, the following possibilities are there:-

a) In case of Mr. Prasad being a resident:
The salary income received in UK as well as India shall be taxable in India.In that case he can get credit of tax paid in UK i.e. 3,105 pounds.The question of national Insurance payment needs to be analysed under the provisions of sec. 80C.

b)In case of Mr. Prasad being a non-resident:
The salary income received in India i.e. Rs. 36,000/- per month shall be taxable in India and the rest income in UK.

Anuj
+91-9810106211
femaquery@gmail.com

sanath

sanath (Querist)
Follow

07 August 2011 Right, WRT to the query, i was wondering how tax releif will have to be worked out, incase the assessee is a resident, is it the same way as it is worked out in sec 91 releief, where there's no DTAA?

Thank You

sanath

sanath (Querist)
Follow

07 August 2011 His Indian taxable income is Rs.2.85 Lacs.
And his UK Income is Rs. 16.1 Lacs.

Hence adding both and finding out the tax payable comes to Rs.4.33 Lacs.

Avg Rate = (4.33/18.95) Lacs * 100 = 22.86%

Avg rate of tax of UK Income is 13.5%

Hence relief = His UK Taxable Income * 13.5% is what you are saying, If I am not wrong.

Now, how is this treatment different from whats given in Sec 91, where tax is calculated when there's no DTAA between the contracting states?

Thank You