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Taxation of transactions having international connections


CA Pulkit Sharma

2014-02-03

Every country have Income Tax Laws except the few. Income earned in that country is taxable in that country.

How the international Taxation handled in India? Which Sections governs the rules regarding international taxations?

Section 9 specifies the income which are deemed to accrue in India. These incomes may form part of incomes earned in outside India and may be taxed in other countries too.

Income Tax Act provides provisions which allow the credit of taxes paid in other countries. The taxes paid in other countries can be deducted from the tax liability in India.

Section 90 governs the provisions regarding double taxation of Income.

Seperate provisions are applicable to Companies having Double Taxation Agreements with India and not having.

Rahul Rai

2014-02-03

You wrote about income on which tax is paid in foreign.

What if some income is to be payble to foreign company and Tax is applicable on that?

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CA Pulkit Sharma

2014-02-03

In that case you need to check section 195, Tax is to be deducted on all forein payment (Except few which are not deemed to accrue in India).

TDS is to be done and form 15cb and 15ca to be filed with Income Tax department and RBI.

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