Tax relief under dtaa and tax residency certificate

Dear Sir

As per DTAA India has signed a comprehensive Agreement with the Goverment of Netherlands.

And As per Income Tax Act 1961 You will have to disclose your global Income in your ITR. If Tax paid in Netherland is more than Income Tax payable in India (i.e tax payable in India INR 30 and you already been paid INR 40 in Netherland) than you can clain Refund for your TDs deducted in India. i.e INR 5

You Need not to obtain TRC from Indian Govt . to claim this Refund i.e INR 5

Note:- The Benefit of DTAA can be exercise to extend of Federal Tax Paid in Netherland. Any Local Tax paid to local govt Like Service tax are not allowed as deduction.

Originally posted by : Jay Kumar Ratan
	Dear Sir   As per DTAA India has signed a comprehensive Agreement with the Goverment of Netherlands. And As per Income Tax Act 1961 You will have to disclose your global Income in your ITR. If Tax paid in Netherland is more than Income Tax payable in India (i.e tax payable in India INR 30 and you already been paid INR 40 in Netherland) than you can clain Refund for your TDs deducted in India. i.e INR 5   You Need not to obtain TRC from Indian Govt . to claim this Refund i.e INR 5   Note:- The Benefit of DTAA can be exercise to extend of Federal Tax Paid in Netherland. Any Local Tax paid to local govt Like Service tax are not allowed as deduction.

Dear Jay,

Thanks a lot for your quick reply. As you mentioned, I have claimed the amount of INR 5 (TDS deducted at source) based on the example scenario.

I read somewhere about the tax residency certificate been made mandatory inorder to claim DTAA relief. With respect to that, shall I initiate a request to obtain the TRC from Indian Tax authorities where I am a resident taxpayer or from the Netherlands tax authority?

Thanks in advance!

Dear Sir

Let Me first clearify your understanding about TRC.

Tax Resident Certificate is a documentry evidence to a person going to obtain the benefit of DTAA. 

Spose you are an Indian Resident and working in Netherland as emplyee. India has signed a bileteral Agreement with netherland govt to give the benfite on tax burden.

If as per netherland govt law Tax rate is 30% and As per DTAA tax Rate is 10% or Nill and you are claiming the benefit of DTAA than netheland govt will ask you for TRC. And you will have to apply for TRC in India from Indian Govt.

This is the concept of TRC. You already live in India and going to pay tax in India, So You Need not obtain TRC in India.

Originally posted by : Jay Kumar Ratan
	Dear Sir   Let Me first clearify your understanding about TRC. Tax Resident Certificate is a documentry evidence to a person going to obtain the benefit of DTAA.  Spose you are an Indian Resident and working in Netherland as emplyee. India has signed a bileteral Agreement with netherland govt to give the benfite on tax burden. If as per netherland govt law Tax rate is 30% and As per DTAA tax Rate is 10% or Nill and you are claiming the benefit of DTAA than netheland govt will ask you for TRC. And you will have to apply for TRC in India from Indian Govt.   This is the concept of TRC. You already live in India and going to pay tax in India, So You Need not obtain TRC in India.

Thanks Jay,

In my situation, I am claiming the DTAA relief on the taxes paid in Netherlands on the tax payable on the global income in India.

As stated previously,

Example, Indian salary = 100

Tax paid in india (TDS) = 5

Netherlands salary = 200

tax paid in netherlands = 40

global income = 300 (100 + 200)

tax payable in india based on global income = 30

Relief claimed = 40 (based on taxes paid in netherlands)

Net Tax payable = 0   (30 - 40)

Tax refund claimed = 5 (tax already paid in india)  
 

I am not sure about my residency status in Netherlands, shall I request for TRC from Netherlands govt since I am asking for bilateral relief in India. Also, the tax refund claim in example above is fine in accordance with the DTAA treaty with Netherlands?

Thanks again in advance!

Dear Sir

You Need not to obtain TRC From Netherland Govt. Too.  Keep the all the documentry record of payment of Taxes in Netherland.

After Filing Income tax Return In India AO could be ask for proof of Tax Payment in Netherland