X an ordinary resident earns income from business in India of Rs. 10,00,000 and income from business in…
The relief is Rs. 1,03,260. The foreign tax rate is Rs. 1,20,000 ÷ Rs. 6,00,000 × 100 = 20%, so the lower Indian rate of 17.21% applies to the doubly taxed income. Thus Rs.…
Choose your answer
X an ordinary resident earns income from business in India of Rs. 10,00,000 and income from business in a foreign country with which India has no double tax avoidance agreement of Rs. 6,00,000 (tax paid Rs. 1,20,000). Average rate of tax payable in India by X is 17.21%. X can claim unilateral double-taxation relief under the Income-tax Act, 2025 of
Answer and explanation
Correct answer A
The relief is Rs. 1,03,260. The foreign tax rate is Rs. 1,20,000 ÷ Rs. 6,00,000 × 100 = 20%, so the lower Indian rate of 17.21% applies to the doubly taxed income. Thus Rs. 6,00,000 × 17.21% = Rs. 1,03,260 under the unilateral-relief provision.
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West Bengal SET (WB SET)