Dear All:
Recently I have received a notice u/s 143 demanding additional tax. When I checked the details, the IT department has denied tax credit/relief u/s 90 (for TDS by US Govt. on Dividend income).
Background Info.: The credit / relief is claimed as per DTAA with USA. US Govt. deducts 25% taxes on dividends paid (by US companies) to Indian citizens & residents. Indian IT dept charges 30% tax on such income. I have shown all (US source) dividend income as other income, calculated tax as 30%, claimed relief as 25% and paid remaining 5% tax.
If I pay the taxes as demanded by IT dept., I would end up paying 55% taxes + interest payment on the dividend income.
Please let me know what I need to do.
kulkash
CAclubindia
