Article 16 - Double Taxation India & Australia

Anand (Mr) (21 Points)

07 September 2020  

I'm currently in Australia and I relocated to Australia on 28th Oct 2019 and was working in India till then. So for FY19-20 I'm ROR in India. However, while being a tax resident in India for FY19-20, can I use the Article 16 to avoid double taxation, instead of using credit method of avoiding double taxation for AY20-21? This way I can avoid paying difference in tax for the income I earned in Australia. 

Tax year in Australia is July to June. I was a tax resident in Australia for Australian Tax year 19-20 and paid my income taxes here. And I've been in Australia for close to 240 days in Australian Tax year. Thus, for considering para 2 of Article 16, I've stayed in Australia for more than 183 days and my employer is based in Australia and paid TDS as per Australian law. Hence, as per my understanding my income in Australia (other state) is not taxable in India (the first mentioned state). Can someone shed some light or gude me in this matter?

 

Relevant section from Article:

ARTICLE 15 : Dependent personal services (AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH AUSTRALIA)

1. Subject to the provisions of Articles 16, 17, 18, 19 and 20, salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

2. Notwithstanding the provisions of paragraph (1), remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if :

(a)  the recipient is present in that other State for a period or periods not exceeding in the aggregate 183 days in a year of income of that other State;

(b)  the remuneration is paid by, or on behalf of, an employer who is not a resident of that other State; and

(c)  the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State.

Thanks in advance!