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Kavya, resident in India for tax year 2026-27, earns Rs. 4,00,000 from professional services rendered…

Section 160(1) of the Income-tax Act, 2025 allows a resident a deduction from Indian income-tax on the doubly taxed income at the Indian rate of tax or the rate of tax of…

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Kavya, resident in India for tax year 2026-27, earns Rs. 4,00,000 from professional services rendered in Country Z, with which India has no agreement under section 159; the income is not deemed to accrue or arise in India. Country Z taxed it at an effective rate of 5%. His Indian rate of tax, worked out as provided in section 160(3)(c) of the Income-tax Act, 2025, is 7.8%. The relief available to him under section 160(1) is

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Section 160(1) of the Income-tax Act, 2025 allows a resident a deduction from Indian income-tax on the doubly taxed income at the Indian rate of tax or the rate of tax of the other country, whichever is lower. The lower rate here is Country Z's 5% against the Indian 7.8%, so the relief is 5% of Rs. 4,00,000, that is, "Rs. 20,000". This corresponds to section 91 of the repealed Income-tax Act, 1961.

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