Computation of relief u/s 90 us [dtaa]

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Z (Querist)
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05 July 2016 Hello experts. Please guide me in computing the relief u/s 90 and help me to increase my knowledge.I am not able to find any relevant material on net to study such an issue. Kindly share your insights.

1.An ordinarily Indian resident has salary income from both India and USA.
2.The F.Y in India is April to March ,but in USA its Jan to Dec.

3.The income which accrued in the period April 2015 to Dec 2015 is $20,485.
4.Tax has been deducted in the foreign country for a total of $4,399 for entire Fiscal year.

5.Actual tax payable in US comes out to be $2,843.
6.Total income as per US return is $32,309

7. Standard deduction available is $10,300 and hence the taxable total income is only $22,009.

Doubts

I. The relief is available on doubly taxed income and we will take that doubly taxed income which gets covered as per Indian F.Y [correct?]

What about $10,300 which has been allowed as standard deduction? Since for computing relief we check only the doubly taxed income and on so much of the income on which tax was not charged in the foreign country by reason of any deduction or exemption or any other reason , should not be called as doubly taxed and hence while doing the computation should I not decrease $10,300?

II. Since the relief is restricted to the amount of tax paid in foreign country , we need to know what is the tax paid in foreign country. Tax of 2,843 relates to the entire Fiscal year but I would need the tax which relates to that income which is covered under Indian Fiscal year, so how to appropriate the tax?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 July 2016 1 You should not decrease $10,300 only deduction as per income tax in India is allowed.
2 Claim relief on proportionate tax paid on the income covered under Indian Fiscal year.

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