Salary income earned abroad - computation

This query is : Resolved

Ajit Hegde (Querist)
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11 May 2016 Dear Sirs,

Stats:
Salary Income (Apr 14 to Aug 14) earned in UK: Rs. 17,00,000 (as per exchange rate provision of Rule 26 read with rule 115)

Residency Status: Resident

Person has earned salary income as mentioned above and Tax is deducted in UK at 20% after allowing a deduction of 10,00,000 (personal allowance - may be a std deduction as per their rules) against 17L

While computing the income as per IT Act, Am I supposed to take 17 L as income or 7 L after deduction

Total Income as per section 2(45) read with sec.5 doesn't say anything on the the deduction to be claimed which is claimed abroad. Is it gross? or Net? to be computed ..

If I take 7L after taking deduction, i would be claiming basic exemption of 2.5 L as per Income Tax act, which would be a double benefit.

If I take 17 L it will result in double taxation ? (since the tax deducted at UK is after considering 10 L as deduction)

Article 24 of DTAA is silent in this.

Kindly help. Give references if possible

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 May 2016 You have to file ITR 2 show 17 lacs under salary head and claim rebate on 20% tax paid on 7 lacs by filling schedule FSI and TR.
You will get relief for the tax paid in UK.

Ajit Hegde

Ajit Hegde (Querist)
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11 May 2016 Thank you

So the logic applied is, 10 Lacs deduction claimed in UK is not taxed and hence to be taxed now in India . Is that right? Any references?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 May 2016 Living allowance on temporary transfer to work in foreign exempted. HRA and other allowable deductions can be claimed.

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