Hi
One of my client who is a Ordinary resident has earned interest income on foreing SB accounts and FD made in US. Total interest for the F-yr 2011-12 is USD 3247.83. Kindly let me know is this income should be included in Taxable income of India and what about tax paid already if any.
Please quote relevent sections to support your answers.
As per my knowledge, Sec 5 says to include all the income (globle income) also in case of Ordinary resident of India.
Reg
Lakshmi Devanand
Yes madam,
your view about taxability of global income is right, your client's global income will be taxed as he is resident in previous year.
Interest on NRE account is exemted u/s 10. If ur client is preparing its accounts on receipt basis then accured interest on FDR is taxable in the year in which it received in cash.
if he has paid tax in foreign country then it is to be seen that whether is India has any Tax treaty with that country. if yes than tax paid in foreign country will be deducted out of tax liabilty in India.
If there is no treaty with foreign country than tax benefit of tax paid in foreign country will be calulated as given u/sec 92..
Chirag N Shah & Associates
Mumbai
CA Inter
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