DTAA Salary Income Accrued for Work Performed in United Kingdom is not Taxable in India, the Salary Received for Work Performed in India is Taxable in India

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The Tax Publishers Income Tax--DTAA Salary Income Accrued for Work Performed in United Kingdom is not Taxable in India, the Salary Received for Work Performed in India is Taxable in India Akhilesh Kumar Sah To avoid double taxation, Double Taxation Avoidance Agreement (for short, 'DTAA') has been made by several countries with India. Treaty benefit shall be applicable to persons of both India as well as of foreign countries who is part of DTAA but the salary received for the services provided in India would be taxable in India for NRI. 1. Introduction Recently, in Sanjay Ajit v. ITO (ITA No. 1317/Chny/2023) decided by ITAT, Chennai on 3-9-2024, one of the issues raised was that AO had erred in law and on facts in ignoring the provisions of section 15 read with section 5(2) and section 9(1)(ii) of the Income Tax Act, 1961 (for short, 'the Act') which clearly provided taxability of salary on the basis of accrual, and not on the basis of receipt of salary income. AO had erred in not appreciating that even under provisions of the Act, salary received in India for services rendered in UK will be taxable in UK only, and not taxable in India. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--DTAA

Salary Income Accrued for Work Performed in United Kingdom is not Taxable in India, the Salary Received for Work Performed in India is Taxable in India

Akhilesh Kumar Sah

To avoid double taxation, Double Taxation Avoidance Agreement (for short, 'DTAA') has been made by several countries with India. Treaty benefit shall be applicable to persons of both India as well as of foreign countries who is part of DTAA but the salary received for the services provided in India would be taxable in India for NRI.

1. Introduction

Recently, in Sanjay Ajit v. ITO (ITA No. 1317/Chny/2023) decided by ITAT, Chennai on 3-9-2024, one of the issues raised was that AO had erred in law and on facts in ignoring the provisions of section 15 read with section 5(2) and section 9(1)(ii) of the Income Tax Act, 1961 (for short, 'the Act') which clearly provided taxability of salary on the basis of accrual, and not on the basis of receipt of salary income. AO had erred in not appreciating that even under provisions of the Act, salary received in India for services rendered in UK will be taxable in UK only, and not taxable in India.