Applicability of dtaa to a tax resident in india

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Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2015 Dear experts,

I want to know the tax treatment of a person who is a tax resident of India, but has migrated to UAE for employment purpose in the FY 2014-15. The facts of the case are as under:
1. Six months salary in India: Say 3,00,000/-
2. Six months salary in UAE: Say INR 3,50,000/-
3. No other source of income.Form 16 available in case of Indian income.

Now, my question is will DTAA between India and UAE be applicable in such a case? If yes, What will be the tax consequence as per the DTAA?

As per my understanding, DTAA will be applicable, but since UAE income is a tax free, The whole 6.5L will be taxable in India.

Please advice
Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 July 2015 Yes the whole 6.5L will be taxable in India.

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Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2015 Thank you sir. Can you give me an analysis of the DTAA? I have read article 15 which pertains to salary income and am a bit confused.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 July 2015 See article 15 2 a, as per this if your stay in UAE is less than 183 days your income earned in UAE will be taxed in India.

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2015 Sir, as per my understanding, the conditions are cumulative as they are separated by "and" instead of "or". That's why I am confused.
If we read article 15 in isolation, the foreign income is not taxable in India. But then why there is this general rule that all worldly income is taxable in the hands of a R&OR..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 July 2015 Foreign income is not taxable in India, only for non resident. For residents it is taxable, but relief given for any tax paid outside India.