Tax credit on withholding tax on dividend

Dear Sirs,

For example, we are the indian company having subsidiary companies in the following countries. While declaring dividends in these subsidiary companies, the withholding tax at the rates mentioned in each country is deducted.

Name of the Country            Withholding tax on dividend

Indonesia                               20%

Bangladesh                            20%

Sri lanka                                  10%

As per the section 115BBD, 15% of tax on dividend income received from these countries is taxable in India.

Please let me know whether we can take tax credit of the withholding tax paid in these countries while paying the tax under section 115BBD. I want to know this on urgent basis. Please let me know sirs.

 

Regards

Srikanth.

Replies (4)

Hi Srikanth,

Just to understand your case right..... Is it that the Indian company who is receiving dividends from its subsidiaries after deduction of withholding tax at the rate of 20%, but is liable to only 15% in India, wants to take credit of the 5%?

 

Thanks & Regards

CA Sheli Sehrawat

Yes, I would like to know whether we can take credit of that 5% or not

My apologies Srikanth...Not being able to find out the exact treatment.

But you can refer to the following link which explains DTAA between India and Indonesia

https://www.rushabhinfosoft.com/webpages/ITAX/DATA/DATA/DOUBLE%20TAXATION%20-%20I.htm#INDO

 

Thanks & Regards

CA Sheli Sehrawat

Thanks. I shall refer the link you have given to findout the solution.

Regards

Srikanth.

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