Double taxation is the process of taxing the income twice a year. Double taxation occurs when the income gets accrued, arises, or is received from a different country. I will share with you how to get double taxation relief in India.
Pay your utility bills using credit cards through NoBroker and earn reward points on your card.Double taxation is available in two ways that are in unilateral relief and bilateral relief. The Government of India has signed a bond of Double Tax Agreement Avoidance with 150 countries so that people living in India can get double taxation relief.
How to claim double taxation relief in India?
Section 90 of the Income Tax Act states about the double taxation relief provisions in India. As per Section 90, you can claim double taxation relief under two methods including:
- The exemption method:
Under this method, the taxpayers can claim exemptions in their resident country even though the income can be generated from other countries. But the taxpayer has to pay taxes for the country where the income is generated. This method helps to save on cross border investments by investors in their countries which in turn benefits businesses globally. This method is also called tax-havens.
- Tax Credit Method
The tax credit method is the process of reducing tax on the individual of the same country he/ she is residing in. Let's say an individual receives a salary working for a job in the U.S. But he is an Indian Resident. In this case, the individual can pay tax under the Indian tax rates and that is how he/ she can save on tax.
I hope you understand how to claim double taxation relief now.
Read more:
What Is Tax Exempt? Is Standard Deduction Applicable In New Tax Regime? Which Income Is Exempted From Income Tax?Shifting, House?
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Authors Of The Question
How to claim double taxation relief in India?
Sremoyee
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2 Year
2022-05-17T10:20:27+00:00 2022-05-17T10:39:04+00:00Comment
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