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DTAA for USA & India Dividend received

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pooja gala

21 Points Posted on 11 August 2020

Mr X Resident of India and works for Microsoft , has received shares as part of Employee benefits from Microsoft USA in 2016, and since then is receiving Dividends for the same on with USA is deducting taxation @ 33%. What shall be the tax rate applicable in India & Income Tax forms /return for the same

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Quick Summary

An Indian resident working for Microsoft USA received shares in 2016 and is now paying 33% tax on dividends in the USA. This discussion clarifies how such foreign dividends are taxed in India under 'Income from other sources'. It also explains how to claim relief from Double Taxation under the India-USA DTAA or Section 91, and how to report this in your Indian income tax return.

CA KARAN SINGH

Auditor at Big 4

490 Points Posted on 11 August 2020

Dividend received from a foreign company will be taxable under head Income from other sources and will be charged to tax at the rates applicable to the taxpayer. However, relief from Double Taxation will be available as per the provision of DTAA or otherwise as per Section 91 (in case there is no DTAA)