Article 25(2) - India USA Treaty - Credit against the Indian taxes - +91-9667714335

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Article 25(2) - India USA Treaty - Credit against the Indian taxes - CA Final International Taxation Elective Paper 6C

ARTICLE 25 (2) – INDIA USA TREATY

Where a resident of India derives income which, in accordance with the provisions of this
Convention, may be taxed in the United States,

India shall allow as a deduction from the tax on the income of that resident an amount equal
to the income-tax paid in the United States, whether directly or by deduction.

Such deduction shall not, however, exceed that part of the income-tax (as computed before the
deduction is given) which is attributable to the income which may be taxed in the United
States.

Further, where such resident is a company by which a surtax is payable in India, the deduction
in respect of income-tax paid in the United States shall be allowed in the first instance from
income-tax payable by the company in India and as to the balance, if any, from surtax payable
by it in India.

KEY FEATURES
Tax on income should be in accordance with the provisions of this Convention
Deduction for US tax limited to income-tax which is attributable to income which may be taxed in the United States
Surplus tax paid in US after set off of income tax at Bullet 2 is adjustable against surtax payable in India