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Dtaa with govt. of bhutan

Tushar Kanti Bhattacharya (Prefessional) (26 Points)

21 November 2014

Some one has earned salary in Bhutan Govt. for 4months only. But thereafter he worked in India. My querry is the tax deducted at Bhutan and India calculated and there is some amount is arise as refund. Can I claim refund from the tax ewihch was deducated from Bhutan?

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6 Replies

Anmol Juneja (Student) (104 Points)
Replied 21 November 2014

As per article 22 of DTAA with Bhutan, tax deducted in Bhutan can only be claimed against income tax payable in India. It can’t exceed the amount of Indian income tax payable. Further this would be claimed as a relief u/s 90 of Income tax act 1961 and if there is no tax payable in India u can’t claim it as a refund as it is a relief but u can do so with tax deducted in India. That’s why it is claimed against Indian income tax payable before claiming tax deducted in India.

Experts plz correct me if m wrong.

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 21 November 2014

Anmol, can you kindly explain by way of an example please. You mean there is a difference between 'relief' and 'refund'.

Thanks,

Anmol Juneja (Student) (104 Points)
Replied 21 November 2014

Here i used the the word relief in a generic way so as to explaing my answer. The logic behind dat is indian government is giving assessee relief for tax already paid in a foreign country so as to avoid double taxation on a particular income and it will do so only when there is indian income tax payable.Why wud indian govt refund a tax collected by a foreign country out of its own pocket?

Thanks for rplyin to my answer.

Tushar Kanti Bhattacharya (Prefessional) (26 Points)
Replied 23 November 2014

Anmol, Thanks for your wise comments. The person who was an employee of Bhutan now in a Indian company. His Total Income is for F/Y 13-14 is Rs.141070/- (therefore no tax has dedcuted) But from Bhutan his total income was Rs.231570/-(tax deducted Rs30575/-) Therefore in India hare is no tax been lavied on the Total income, but as per your discussion he can not claim any amount of refund only for relief u/s 90 (your point is partinant). Then what will be consequence of Tax, on that perticular situation? As because there is no such amount of tax on which any amount of relief will deduct. Then what will be the calculation?

Tushar Kanti Bhattacharya (Prefessional) (26 Points)
Replied 02 December 2014

The calculation of Incme Tax about DTAA with Bhutan Govt.

The person who was an employee of Bhutan now in a Indian company. His Total Income is for F/Y 13-14 is Rs.141070/- (therefore no tax has dedcuted) But from Bhutan his total income was Rs.231570/-(tax deducted Rs30575/-) Therefore in India hare is no tax been lavied on the Total income, but as per law he can not claim any amount of refund as because thee amount of Indian Income Tax is less then the Bhutan Govt. deducted tax only he couls ask for relief u/s 90 if arises. Then what will be consequence of Tax, on that perticular situation? As because there is no such amount of tax on which any amount of relief will deduct. Then what will be the calculation?

Read more at: /forum/dtaa-with-govt-of-bhutan-312204.asp

CA Goutam Sharma (Chartered Accountant in Practice) (468 Points)
Replied 13 December 2018

The assessee has to add both income from bhutan and India and calculate tax thereon as perindian law. He will be eligible for relief of tax paid in bhutan from the total tax calculated in india