I am a researcher working in french university since last year and my salary comes from french research organization. As I have been in France for the whole year I am a NRI as per as Indian tax rules are concerned. Therefore, I do not have to declare my tax return in India or in other words my salaried income is not taxable in India. Now, I am having confusion with the article 22 of Indo-French DTAA. There it says my income is only taxable in India. Whereas, I get a tax bill from French Tax Authority. Could you please explain what is the actual meaning of the first clause of Article 22 and how to get benefit from that?
Hi,
You need to check from someone who is expert in french tax laws. As per article 22, your income should be taxable in India.
However, as far as Indian income tax is concerned, you have an option to choose the taxation rule from treaty or act whichever is beneficial for you. If you dont want to pay tax in India, you can choose taxation as per income tax act.
As per income tax act, you are not liable to pay tax in India.
You may find the above little confusing but thats how it is.
So, just to check if I understood correctly. Is it like: if I pay tax in france, I dont have to pay tax in India. But if I choose to use aricle 22, I have to pay tax in India and not in France.
Yes, if you pay tax in France, you dont have to pay tax in India. If you choose to use article 22, you will have to pay tax in India. However, i dont know about France, whether you still have to pay tax in France or not.
Hi,
- As per Article 22, you are liable to pay tax on income in India for two years. The only exception is income from the private benefit of the specified person or persons.
- You can file the ITR in India and claim the benefit of taxes paid in France. It is applicable only for two years.
Thanks
As per the article it says that you will be considered as resident of India for 2 years from the date you went to France and your remuneration shall be taxable in India only. So you need to ask the government there to give you refund of tax on such income as such income will be taxable in India only.
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Thank you
Hi,
Hope you are doing well !
Yes, your understanding is correct.
If you pay tax in France, you do not have to pay tax in India. if you choose to use article 22, then you will have to pay tax in India.
For french tax laws applicability, you need to consult with someone who is expert in french tax laws.
Hi,
- Benefit of DTAA is available in case income is doubly taxed which mostly happens in case of resident assesee's.
- As you are NRI and income is doubly taxed, you can take the benefit of taxes paid in India in France or vice-versa.
Thanks
Hi,
My advise will be to get an opinion from a french tax laws expert as well. Having said that, your understanding is correct about the double taxation. If you pay tax in France then you need not pay tax in India. However, if you choose to use article 22, then you will have to pay tax in India.
Regards,
Nikhil.
Hi,
If you pay tax in France, then you don't have to pay tax in India because you can choose from act or treaty whiceho is favourable to you.
If you choose treaty then you will have to pay tax in India. Whether you have to pay tax in France or not that depends upon the tax laws in France.
Hi,
You need to consult the same with expert in french tax law.
Yes, you are right.
if you pay tax in france, you dont have to pay tax in India. But if you choose to use aricle 22, you have to pay tax in India.