Foreign Income

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This query is : Resolved

MAHENDRA (Querist)

13 June 2011 We have received a Construction contract outside India i.e. ( Salthaneth of oman ) and for the completion, we have established a new company with a local partner of that country. Our stake in that New company is 70 %.
Now my questions are as follows.
1)Weather the profit after taxation of our foreign company is taxable in India or not?
2)If we pay tax on the said profit there, please justify weather that profit is taken here in the main company as a income? Or is foreign profit is exempt from tax in India?
3)Weather interest on partner’s capital is allowable expenditure in that county. ( Salthaneth of oman ) & what is the tax procedure in india ?
4)Can u provide the Tax rates of (saltanath of oman) ?
5)Tell the other or better way to bring profit in India?

Thanks in Advance…
Mahendra Kolaskar

CA. Saurabh Agrawal

CA. Saurabh Agrawal (Expert)

14 June 2011 1. You hsve to see DTAA between India & Oman then you csn use the provison in DTAA or in normal provision of Income tax which is beneficial to you.

2. According to me, foriegn Profit earned by indian comapany whose subtatial mgmt & control lies in india is taxable in india.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

14 June 2011 1. Profit is not taxable as such but the profit shall be remitted back to india as a dividend or interest. Dividend shall be taxable @15% and interest shall be treated as normal income.
2. No
3.How can Company have partners.
4. Consult local consultant in oman.
5.As told in point 1 or else the issue needs to be discussed.

Anuj
0-9810106211

CA. Anuj Gupta

CA. Anuj Gupta (Expert)