2. STEP i

4. It’s a fee a person pays
to enjoy common
Where he resides
Where he transacts
Where he visits

5. Tax on Earnings
Tax on
Consumption

6. Direct Taxes
Indirect
Taxes

7. With developments in
business and commerce

10. Tax is
Consequent to a transaction
NOT
Determinant of a transaction

11. STEP I i

12. INCOME
TAX ACT
1961

13. Sec 6 / 9
Sec115C to 115-I
Sec 90 / 91
Sec195

14. Resident
Stay of 182 days
Stay of 60 days
If Last 4 years stay of 365 days

15. Non resident
9 of 10 years
OR
<729 days in 7 years

16. On Income
Tax in India
Received
Earned
Accrued

17. Rate of TAX
Resident Individual rates
20% on Gross Investment Income

18. Rate of TAX
10%
20%
40%

19. Special provisions…
Person of Indian Origin
Citizen Of India
Non Resident

20. Investment Income
Specified Assets
LTCG

21. Shares
Deposits
Debentures
Government Security

22. NO Return Of Income
Investment Income @20%
Long Term Capital Gains @10%
No Indexation
Capital Gains in Fx

23. Option Of the assessee
Year – on – year basis

24. STEP I I i

25. International Trade
Where to

26. Source Tax
Resident Tax
Resident of Two

27. Taxati

28. Judicial Double
Taxation
Same
Income
Same
Person
Different
Jurisdiction

29. Economic Double
Taxation
Same
Income
Different
Person
Different
Jurisdiction

30. Tax
Treaties
do
NOT
they LIMIT
CREATE
exercise
Taxing

33. Model
Conventions
OECD Developing
Countries
Residence
UN Developed
Countries
Source
US World
Income

34. Judicial Double
Taxation
Same
Income
Same
Person
Different
Jurisdiction

35. Economic Double
Taxation
Same
Income
Different
Person
Different
Jurisdiction

37. Bilateral

38. Bridge that
connects
The Domestic tax
laws
Of 2 Countries

40. 7 Sections

42. Article 1: Applicability
Article 2: Taxes Covered
WHO ? WHAT ?

43. Article 3: General Terms
Article 4: Residence
Article 5: Permanent
Establishment
WHO ?

44. Article 6 to 21: Types of Income
What ?

45. Article 22:
What ?

46. Article 23: Tax Credits, etc
How ?

47. Article 24 to 29:
Where?

48. Article 30 - 31:
When ?

49. STEP I v

51. Unilateral
Domestic

52. Bilateral
Tax Treaties

56. HOW …..

58. STEP v

60. 236 countries
204 sovereign
193 part of UN
85 Tax
Agreements
73
Comprehensiv
13 Limited
e
3 Terminated

61. 73
Comprehensiv
e

62. 13 Limited
Peoples Democratic Republic of Yamen (1988)
Saudi Arabia (1991)
Yamen Arab Republic (1986) USSR (1976)
Lebanon (1968) Pakistan (1988)
Ethiopia (1976)
Kuwait (1982)
Czechoslovakia (1978) Iran (1973)
Bulgaria (1977)
Afghanistan (1975) UAE (1989)

63. 3 Terminated
Pakistan (1947)
Czechoslovakia (1986)
Union of Soviet Socialist Republic(1989)

64. c d
o e
n
c
l
u
to

66. Income – Source OR Residence
Domestic Tax Laws
Special Provisions
Tax Treaties
Tax Credit in Home Country

67. FINALLY….

69. Abdulla Pettiwala
Corporate Tax Team,
29-Sep-11