Latest news with #DoubleTaxationAvoidanceAgreement
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Business Standard
3 days ago
- Business
- Business Standard
Paid taxes abroad as an Indian resident? Here's how to claim tax credit
If you're an Indian resident earning income overseas and have already paid tax on that income abroad, you may be eligible for a foreign tax credit (FTC) while filing your tax returns in India. However, experts caution that to successfully claim it, careful documentation and timely filing are critical. Who can claim foreign tax credit in India? Any Indian resident, individual or entity, who has paid taxes in a foreign country on income that is also taxable in India, can claim the foreign tax credit. 'FTC can be claimed whether or not there is a Double Taxation Avoidance Agreement (DTAA) between India and the foreign country,' said SR Patnaik, partner (head-taxation), Cyril Amarchand Mangaldas. 'The credit is allowed in the year in which the corresponding income is taxed in India,' he added. According to Abhishek Nangia, senior associate at SKV Law Offices, 'FTC helps avoid double taxation and can be claimed under Section 90 or 91 of the Income Tax Act. The credit is limited to the lower of the foreign tax paid or the Indian tax payable on that income.' Documents needed to claim foreign tax credit The experts suggest that filing Form 67 before submitting your income tax return is a mandatory requirement. This should be accompanied by: A statement of foreign income taxed in India Proof of foreign tax payment (such as bank challans, tax certificates) Nature and amount of income Tax Residency Certificate (TRC) from the foreign country (recommended, especially when claiming DTAA relief) In some cases, Form 10F and a No Permanent Establishment declaration 'A self-declaration along with proof of tax deduction or payment abroad is also necessary,' noted Suresh Surana, chartered accountant. Common mistakes to avoid while claiming foreign tax credit All three experts agree that filing Form 67 late or with incomplete details is a major reason for rejections. Errors in reporting foreign income, mismatches with Form 26AS, or claiming FTC on income that is exempt in India also trigger scrutiny. 'Disputed foreign taxes cannot be claimed unless resolved, and penalties or interest paid overseas are not eligible for credit,' Nangia added. Surana warns that 'claiming more credit than allowed under Indian tax rates or without proper documents may attract notices or disallowance.' How credit is calculated The credit allowed is the lower of the foreign tax paid or Indian tax payable on that same income. 'If the foreign tax is higher, you only get credit up to Indian rates; the rest is your loss,' said Nangia. Patnaik clarified that Rule 128 governs this, and DTAA provisions apply if beneficial to the taxpayer, except where GAAR is invoked. In DTAA cases, Surana said, credit may be given under the exemption or credit method, and if no DTAA exists, unilateral relief is allowed under Section 91 of the Income Tax Act. Bottom line: Claiming foreign tax credit is not difficult, but missing even a single step can cost you. To stay on the right side of the tax department, stick to timelines, maintain thorough documentation, and consult a tax professional if needed.
Time of India
11-06-2025
- Business
- Time of India
'Cutting red tape in India key to Swiss investments': Helene Budliger Artieda
Bern: A good regulatory framework and cut in red tape in India is important to attract Swiss investments, Switzerland's state secretary for economic affairs Helene Budliger Artieda has said. She also ruled out any impact of the withdrawal of most favoured nation treatment for India by Switzerland under the bilateral tax treaty on investment flows under the trade agreement with European Free Trade Association (EFTA). "We need to have the best framework conditions (for the $100 billion commitment on investment) and this was part of the business roundtable meeting in the presence of minister Goyal. It will be important that red tape be cut as much as possible," she said. Even in Switzerland, companies complain about too much red tape, she added. "It will be very important that India creates a good framework for Swiss investments to come in," she told reporters after her meeting with commerce and industry minister Piyush Goyal on Tuesday. Live Events India and the EFTA, which includes Switzerland, Norway, Iceland and Liechtenstein, signed a free trade agreement on March 10, 2024, which is expected to come into force in a few months. It provides for an investment commitment of $100 billion in 15 years from the grouping in lieu of customs duty concessions. Goyal is on a four-day visit to Switzerland and Sweden. On the issue of the Swiss government suspending the MFN clause in the Double Taxation Avoidance Agreement (DTAA) between India and Switzerland, Artieda said there has been some misunderstanding on this. "I think it's important to know that both India and Switzerland share a double taxation treaty and that treaty is valid and that means there will not be any issue," she said. In a statement in December 2024, the Swiss government announced the suspension of the MFN clause in the DTAA between India and Switzerland, potentially impacting Swiss investments in India and leading to higher taxes on Indian companies operating in the European nation. She noted that the trade agreement will help increase exports of Swiss watches and chocolates to India as companies will have the advantage of preferred access. New Delhi is also in talks with the European Union for a comprehensive free trade agreement. (The correspondent is in Switzerland at the invitation of the ministry of commerce and industry.)
India.com
08-06-2025
- Business
- India.com
India-UK Ties Strengthen: PM Modi, UK Foreign Secy Discuss Bilateral Cooperation
New Delhi: Prime Minister Narendra Modi met with UK Foreign Secretary David Lammy on Saturday, discussing the growing momentum in bilateral ties between India and the UK. The meeting follows the successful conclusion of the India-UK Free Trade Agreement (FTA) and the Double Taxation Avoidance Agreement. According to the Ministry of External Affairs (MEA), PM Modi expressed satisfaction at the progress made in the India-UK Comprehensive Strategic Partnership. He welcomed the continued collaboration under the Technology Security Initiative, which aims to shape trusted and secure innovation ecosystems. The initiative is expected to enhance cooperation in areas such as trade, investment, defense, and technology. Lammy conveyed the UK's strong interest in further enhancing cooperation across key sectors, including clean energy and innovation. He expressed confidence that the FTA will unlock new economic opportunities for both countries. The two leaders also exchanged views on regional and global issues, with PM Modi underscoring the need for decisive international action against terrorism. The UK Foreign Secretary strongly condemned the recent Pahalgam terror attack and expressed support for India's fight against cross-border terrorism. PM Modi appreciated the UK's support in this regard and emphasized the importance of international cooperation in combating terrorism. During the meeting, Prime Minister Modi also extended his warm greetings to UK Prime Minister Sir Keir Starmer and reiterated the invitation for him to visit India at the earliest mutual convenience. In a post on X, PM Modi expressed his pleasure at meeting David Lammy and appreciated the UK's support for India's fight against cross-border terrorism. He highlighted the remarkable progress made in the India-UK Comprehensive Strategic Partnership, further strengthened by the recently concluded. PM wrote, "Pleased to meet UK Foreign Secretary Mr. David Lammy. Appreciate his substantive contribution to the remarkable progress in our Comprehensive Strategic Partnership, further strengthened by the recently concluded FTA. Value UK's support for India's fight against cross-border terrorism." Pleased to meet UK Foreign Secretary Mr. David Lammy. Appreciate his substantive contribution to the remarkable progress in our Comprehensive Strategic Partnership, further strengthened by the recently concluded FTA. Value UK's support for India's fight against cross-border… — Narendra Modi (@narendramodi) June 7, 2025 A statement from the external affairs ministry said Modi had 'underscored the need for a decisive international action against terrorism and those who support it' - an apparent reference to Pakistan. The two leaders discussed regional and global issues and Lammy 'strongly condemned the Pahalgam terror attack and expressed support for India's fight against cross-border terrorism', the statement said. On the other hand, EAM Dr S Jaishankar also reiterated India's 'zero tolerance' policy for terrorism and the need for decisive international action against terror and those who support it during meetings with British Foreign Secretary David Lammy on Saturday. Taking to his social media, he wrote, "Glad to meet UK Foreign Secretary David Lammy today in Delhi. Appreciate the UK's strong condemnation of the terrorist attack on Pahalgam and support in combating terrorism. Our conversation focused on the significant strides being made by the Comprehensive Strategic Partnership. Agreed that as our collaboration continues to grow, new opportunities emerge. Also discussed global and regional issues as well as cooperation in multilateral fora." Glad to meet UK Foreign Secretary @DavidLammy today in Delhi. Appreciate UK's strong condemnation of the terrorist attack on Pahalgam and support in combatting terrorism. Our conversation focused on the significant strides being made by the Comprehensive Strategic… — Dr. S. Jaishankar (@DrSJaishankar) June 7, 2025 Lammy arrived in New Delhi on Saturday morning for meetings to review the bilateral partnership, especially trade and strategic ties, a month after India and the UK finalised the FTA. Lammy had visited Pakistan shortly after New Delhi and Islamabad reached an understanding on halting military actions on May 10.
India Gazette
07-06-2025
- Business
- India Gazette
UK Foreign Secy Lammy meets EAM Jaishankar, offers condolences on Pahalgam attack, hails India-UK FTA as 'new era' in ties
New Delhi [India], June 7 (ANI): UK Foreign Secretary David Lammy met External Affairs Minister (EAM) S Jaishankar in Delhi on Friday, where he expressed condolences over the recent Pahalgam terror attack and reiterated the UK's support in combating terrorism. Lammy also spoke about the recent progress in the India-UK Free Trade Agreement (FTA), underscoring growing education and trade cooperation. Offering condolences on the terrror attack, Lammy said, 'It is obviously also sadly the case that there has been a horrific terrorist attack since we last met and my prime minister wishes me to convey once again the deep condolences of the UK and a hand of friendship with India and support as we deal with the terrorism threat in a comprehensive manner.' Referring to the newly finalised FTA between the two countries, Lammy said, 'Since I was last here in India, our country has won a trophy which is that long-held prize of an FTA which I think is the beginning of a new era in relations between our two countries and allows us to move forward with a degree of ambition.' He also noted that the agreement is expected to increase bilateral trade by Pound 25.5 billion in the coming period and welcomed the growing interest among UK universities in forging partnerships in India. 'I'm very pleased that we are able to talk about our comprehensive strategic partnership to build on the technology security initiative that we launched last year to see more universities desiring of partnership and opening up here in India and of course our new agreement will increase trade by 25.5 billion pounds over this next period which is truly remarkable,' he said. Lammy expressed gratitude for his visit and appreciated Prime Minister Narendra Modi for granting him an audience. 'I'm very pleased to be back in India and very grateful to Prime Minister Modi once again giving me an audience and giving me so much of his time at a very very busy and challenging time,' he said. External Affairs Minister Jaishankar also spoke on the occasion, calling the FTA and the Double Taxation Avoidance Agreement a 'milestone' in bilateral ties. 'The recent conclusion of the India-UK FTA and the Double Contribution Convention is truly a milestone. It will not only propel our two-way trade and investment but will also have a positive effect on other strategic aspects of our bilateral ties,' Jaishankar said. (ANI)
Economic Times
13-05-2025
- Business
- Economic Times
NRI Talk: Why NRIs in Dubai and Singapore pay zero tax on mutual fund gains, Nitin Aggarwal explains
In this edition of NRI Talk, Nitin Aggarwal, Director of Investment Research and Advisory at Client Associates, breaks down why NRIs residing in countries like Dubai and Singapore pay zero tax on their mutual fund gains in also shares valuable insights on why India continues to be a top investment destination for NRIs, common pitfalls to avoid, and the sectors they're most bullish on. From tax advantages under DTAA to the long-term wealth mindset of global investors, this conversation offers a deep dive into how NRIs are approaching India's growth story. Edited Excerpts - ADVERTISEMENT Q) Thanks for taking the time out. How are NRIs looking at India as a long-term investment destination? And, what are the other hot countries which they invest in?A) India is one of the most preferred markets for the long-term investments for NRIs. Several clients have increased exposure to India in recent years as there is no country other than India with strong and stable economic growth prospects. Q) There is big debate on social media about taxation. Help us understand why NRIs In Dubai, Singapore & Mauritius have to pay zero tax on mutual fund gains? A) The debate stems from a recent ruling by Income Tax Appellate Tribunal (ITAT) where it ruled that under the Double Taxation Avoidance Agreement (DTAA), NRIs are not required to pay long-term taxed on mutual funds gains and these should be taxed in the residing countries. And since some of the countries, such as UAE, that India has DTAA do not charge capital gains, the NRIs in those countries will effectively pay Zero tax on gains from mutual fund investments in India. Q) What are the big mistakes which NRIs should avoid when making investment in India? ADVERTISEMENT A) We always advise to understand the risk associated with the investments. We advise using a balanced approach instead of just chasing returns.Q) What is the money mindset which NRIs follow. Are there any common attributes? ADVERTISEMENT A) Most of the NRIs that we engage with have a long-term investment horizon. They are looking to build wealth through compounding over the long-term. Q) Which investment options or asset classes are hot favourites of NRIs and why? ADVERTISEMENT A) Most of the NRIs are looking to diversify their exposure by building positions in high growth, stable economies. Q) Which sectors are more preferred when NRIs look to invest in India? A) Currently we are favouring financial services and consumption driven sectors, and that is what we are advising out clients to allocate money too. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
