Section 96 of Income Tax Act – Meaning of impermissible avoidance arrangement. An arrangement is an impermissible avoidance arrangement, if its main purpose , of the arrangement, or step in an arrangement, is to obtain a tax benefit (“Main Purpose Test”) and it satisfies one or more of the conditions : Arrangement creates rights or … Read more
Section 97 of Income Tax Act – Circumstances in which arrangement would lack commercial substance Section 97 of Income Tax Act provides that an arrangement shall be deemed to lack commercial substance, if — Substance or effect of the arrangement as a whole, is inconsistent with, or differs significantly from, the form of its individual … Read more
Section 95 of Income Tax Act – Power of tax authority to declare an arrangement as an impermissible avoidable arrangement Section 95 of the IT Act, 1961, empowers the tax authority, to declare an arrangement as an impermissible avoidable arrangement. Tax authority has also power to declare a step in, or a part of, the … Read more
Different Types and Methods of Double taxation avoidance agreements (DTAA) International double taxation has adverse effects on the international trade and services. Taxing the same income twice by a two or more countries would disincentivise international taxation. The domestic laws of most countries mitigate the double taxation by providing unilateral relief. But since, there is … Read more
Double Taxation Avoidance Agreements Examples India, under section 90 of the Income tax act 1961 is empowered to enter into Double taxation avoidance agreements. The country has established one of the largest networks of DTAA with over 90 countries. Double Taxation Avoidance Agreements Examples Some of the examples of such DTAA’s are as follows – … Read more
List of Countries having Double Taxation Treaty with India In order to promote international trade, and attract foreign investment in India, India has entered into DTAA with the following countries : – These DTAA are basically, based on the UN model tax convention, while appropriate changes have been agreed between India and respective countries, to … Read more
Section 91 of Income Tax Act with Example Countries With Which No Agreement Exists – Unilateral Agreements – Section 91 of Income Tax Act i. Conditions for claiming relief u/s 91(1) of Income Tax Act : – While India has double taxation avoidance agreement with many countries in the world, there may be certain countries, with … Read more
Tax Residence Certificate (TRC) A tax residence certificate is required to claim the benefit of a Double Taxation Avoidance Agreement (DTAA”) entered into between India and a foreign country. Tax residency certificate can be required in respect of two situations (a) A non-resident deriving income from India (b) An Indian resident deriving overseas income . … Read more
DTAA between India and USA The Double Taxation Avoidance Agreement DTAA between India and USA has been entered for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income . This DTAA between India and USA shall apply to persons who are residents of one or both of … Read more
Double Taxation Avoidance Agreement – Article 21 – Other Income OECD Model Tax Convention on Income and on Capital 2017 UN Model Convention 2017 1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. 1. … Read more