Income tax return on income from canada

Dear Sir,

One of my niece has worked for seven months in India in FY: 2012-13 and the rest five months in Canada earning income in Canadian Dollars.  Appropriate tax was deducted from her income from both the domestic as well as salary earned from Canada.

Can you let me know whether she has to pay tax in India on the income she has earned from Canada before filing her Income Tax Return for the above period?  As you know, there is a DTAA between India and Canada.

If she has to pay tax in India on her income from Canada also, then how can she claim the refund of this double tax (paid in India and Canada on the same income)?  What is the procedure to claim refund of the double tax paid, what are the Forms to be filed and the documents to be submitted to claim the refund?

Thank you,

Best Regards,

 

P M Suresh

Replies (1)

1. Your Niece is resident in India as she has stayed for 7 months which is more than 182 days.

2. Hence the income earned in canada is taxable in india.

3. Hence she has to pay tax in india on canadian income.

4. The tax she paid in canada, will be allowed as relief from the average tax payable in india. By relief I mean that tax paid in canada will be treated as tax paid in india but not the full amount. Only average tax.

5. DTAA benefit will not be available as she is resident indian.

 

I hope the above solves your queries.

 

 

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