Dtaa: income tax for resident indian serving in australia

DTAA states : " 15. DEPENDENT PERSONAL SERVICES 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. May please shed some light on (b) and (c) above and do they permit claiming full exemption on the salary earned there (Australia) or only tax deducted can be credited for fy 2015-16.

Regards Ravi Prabhakar

Originally posted by : Rajan svr

I have a question regarding income tax exemption under DTAA between India and Australia. This is reagrding an Indian person who left India on 03/10/2015 for a continuing job with an Australian company, who paid him salary which was deposited in australian bank and tax was deucted by the company. While I undrestand that he will have to declare the income as part of his tax returns will the net income earned in Australia(25 Lacs) after TDS there will be exempt in India under provision of DTAA specifically 15(2)-b & c .

DTAA states : " 15. DEPENDENT PERSONAL SERVICES 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. May please shed some light on (b) and (c) above and do they permit claiming full exemption on the salary earned there (Australia) or only tax deducted can be credited for fy 2015-16.

Regards Ravi Prabhakar

What treatment was given for this. If we read Article 15 along-with article 4 in DTAA, it seems a person can be resident of one of the country only and in your case India. So were allowed exemption or you took credit.