Help with tax calculation under dtaa with luxembourg

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I am quite confused on the method to be adopted under Section 90 for calculating DTAA benefits. Please kindly help with the situation below -

1. Person is resident in India for 8 months and overseas for 4 months in FY17-18. Overseas country (Luxembourg) has DTAA with India.

2. Income from overseas is Salary income on which tax has been deducted at an average rate of 25%. Assume the salary income is 20L and tax deducted is 5L

3. Salary income in India is 10L.

4. Other sources of income in India is 1L (includes 10,000 as savings interest). No other income in India.

5. Deductions in India are as follows -

  • U/s 80C: 1.5L
  • U/s 80D: 5,000
  • U/s 80TTA: 10,000

For purpose of calculating average tax rate will the decutions be taken into account? Request to kindly give inputs on tax credit which can be claimed based on above example.

Thanks & regards

Sandeep

Replies (1)
Yes for calculating average tax rate u need to divide the total amount of tax by taxable income and not the gross income

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