Withholding Tax -Refund

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This discussion clarifies that you generally cannot claim a refund for excess withholding tax deducted in India, particularly when a Double Taxation Avoidance Agreement (DTAA) is involved. The relief available is typically limited to the tax liability on the specific project or income where the withholding tax was deducted, rather than a full refund of the excess amount. The withheld tax usually remains with the country where it was deducted.

Aryan

Aryan (Querist)
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27 December 2021 Dear Expert,

We want to know about Withholding Tax Refund from Indian Income Tax Department.

For example:
Our Income Tax Liability is Rs.50/- in a Financial Year, Our Withholding Tax is deducted Rs.70/- (from DTAA country). Can we get Rs.20/- from Income Tax Department?

And what will happen to this Rs.20/- ???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 December 2021 No such refund you will get it from Income tax department.
Relief of income tax payable in India only can be claimed against foreign witholding tax.

Entire 70 witholding tax goes to the country witheld the tax.

Aryan

Aryan (Querist)
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28 December 2021 Sir, can we claim withholding tax credit for the total tax payable in the financial year or only in the project on which withholding tax has been deducted or only, please clarify it.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 December 2021 Only in the project on which withholding tax has been deducted.

Aryan

Aryan (Querist)
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28 December 2021 Ok Thank you so much.

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