CREDIT METHOD. 1. Where a resident of a Contracting State derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in that other State; and as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in that other Article 23 B State. Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in that other State.
CREDIT METHOD. 1. Where a resident of a Contracting State derives income or owns capital which, in accordance with the provisions of this Con-
CREDIT METHOD. 1. Where a resident of a Contracting State derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in that other State; and as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in that other Article 23 b
CREDIT METHOD. Credit Method is preferable as the assesses gets taxed at domestic tax rate without any double tax and country also gets its eligible amount of Tax. Tax sparing • Thus the tax sparing credit, in the context of tax treaty, refers to the provisions in the tax treaties between contracting states which give benefit to the residence country to give credit not only for taxes actually paid in the source country but also for taxes which would have been paid but exempted in the source Availing of DTAA Benefit – In India’s perspective • A non-resident assesses must furnish a ‘Tax Residency Certificate (TRC) or Form 10F obtained from the tax authorities of the other country where he resides. As said earlier, the income will be entirely exempted or it may be taxed at a lower rate. If it is taxable under DTAA arrangements, the non-resident assesses has to pay the tax in India and then claim the refund of such taxes paid against the tax liability in his home country. Duration and Rates of DTAAs • Generally, these agreements will continue indefinitely until officially terminated by either Party of the Agreement. The Rates and Rules of DTAA will vary from country to country. For instance, TDS rates on interests earned will be charged either at 10 percent or 15 percent. Concluding With • Treaty does not create any additional tax burden; it can only relieve tax • That's the "magic" of double-taxation treaties: you can shop around for the lowest taxer.
CREDIT METHOD. 1. Where a resident of a Contracting State derives income or owns capital which, in accordance with the provisions of this Con- Article 23 B vention, may be taxed in the other Contracting State, the first- mentioned State shall allow as a deduction from the tax on the in- come of that resident an amount equal to the income tax paid in that other State; and as a deduction from the tax on the capital of that resi- dent, an amount equal to the capital tax paid in that other State. Such deduction in either case shall not, however, exceed that part of the in- come tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in that other State.
CREDIT METHOD. 1. It is agreed that double taxation shall be avoided in the following manner:
