Hello,
Assume, an Indian native holding stocks worth 10 lacs in a Netherlands firm.
He receives a dividend of 1 lac every year.
How is this treated while filing tax (while his taxable income from his job > 18 lacs/year)
a) taxed at 30% tax slab
b) tax avoided in order to avoid double taxation
c) taxed at any other rate (10 or 15 %)
Kindly clarify.
Thanks,
Ram
Dividend Income received from a foreign company is not exempt u/s 10(34). Hence, it is very much taxable.
Assuming that you are resident, The income above will be included in the computation under the head "Income From Other Sources".
India has entered into a Double Taxation Avoidance Agreement with Netherlands. "Article 10 - Dividend " says, Both the states have the right to tax the dividend earned in one of the country.
Since you have paid tax in netherlands, you can claim relief u/s 90A.
so, you are supposed to add the dividend income in your computation sheet and then claim relief for the same.
CAclubindia
