DTAA but double taxed?

I was on deputation to UK in FY13-14 and then to Switzerland from Feb-14 till Dec-15. I am back in India since Jan-16 and as per the Tax laws of India, I am Resident Indian for even FY15-16 (AY16-17). This part I totally understand. What I don't understand is, my employer has deducted the tax in Switzerland for my Indian Salary component (after converting it into CHF). That is from Apr-15 till Dec-15 for current FY, I have already paid I-T in Switzearland for Indian salary. Now, in my January payslip my employer had deducted the I-T for the whole current FY and not just for the months I am going to be India. Isn't this WRONG? As per the DTAA between India and Swiss Confederation, if the tax is paid in Switzerland already, I am not supposed to pay it again India. Please look into this and provide your advice.
Asked 9 months ago in Income Tax from Mumbai, Maharashtra
need to check and get back sir
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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Dont worry, You can take tax refund in India  on the amount which you have paid on Switzerland subject section 90/91 of the Income tax Act.  
Deepak Rathore
CA, New Delhi
23 Answers
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The matter is complicated and it shall require detailed understanding of multiple aspects and transactions. it is best you consult a CA practicing international taxation. Please treat this seriously as any undeclared income abroad can have serious issues in India including imprisonment. 
Shashank Surana
CA, Chennai
60 Answers
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Hello sir,

I did not intend to say that there was undeclared income. I only meant that unless return is filed with the help of an expert who ensures everything if filled in an appropriate manner, you could attract problems.We have a separate international tax department and in case you are interested, my expert partner could assist you in filing your return.
Shashank Surana
CA, Chennai
60 Answers
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Hello Sir,

If I have understood your query correctly, it appears that the Swiss have deducted your respective taxes as per their law for the period you have worked for them. 

Now when you have returned to India, your company is planning to deduct taxes on the entire amount i.e paid to you in Switzerland as well as payable to you in India. 

In this case you can inform your Finance team about the taxes deducted in Switzerland and provide them with a certificate if possible. They may either submit it to the IT department for a No Deduction/ Lower Deduction Certificate. You need to discuss this issue with your company and come to a conclusion or you urself can apply for one if your Company does not take the initiative.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP 
Rohit R Sharma
CA, Mumbai
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In the present case you can claim relief U/s.90/91.

Income is taxable on two basis viz. i) Source of income basis and ii) Residential Status Basis, which results into double taxation of same income of the person.
Firstly, such income is taxed in the country in which such income is generated and again, the same income may be taxed on the basis of residential status of the person in another country.  In order to prevent this hardship  or to avoid  double taxation , relief is provided to the tax-payer.

To avoid  double  taxation and also with a view  to ensure that national economic  growth does  not suffer, the Central government  (u/s 90 of the Income Tax Act) has entered  into Double  Tax Avoidance Agreements  with other countries (known as 'treaties' or 'DTAA') with following objectives:

• Avoidance of double taxation
• Mutual exchange of information for the prevention of evasion or avoidance of income-tax, or investigation of cases of such evasion or avoidance
• Recovery of income-tax

Generally, such agreement provides relief through following methods:

Exemption Method: In this method, one country provides exemption to such type of income.Generally, residence country gave up its right and the country of source is then given exclusive right to tax such incomes.

Credit Method: In this method resident remains liable in the country of residence on its globalincome, however as far the quantum of tax liabilities  is concerned credit or deduction  for tax paid in the source country is given by the residence country against its domestic tax as if the foreign tax were paid to the country of residence itself.

Shyam Sunder Modani
CA, Hyderabad
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Dear sir,

You can claim credit of tax paid in Singapore under dtaa of India and Switzerland. 

while filing your return you should claim the same.
Abhishek Dugar
CA, Mumbai
766 Answers
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1. Residency status is determined for a particular financial year. Hence, in your case you will be resident in India for the whole year (i.e even for the period from April to December) assuming you were residing in India before FY 2013-14. Accordingly, you salary earned in UK will also be taxable in India.

2.Will check and revert.

3. You dont need to submit any proof until or unless asked by the income tax department.

4. yes. you can e-file your return.

Thanks and Regards,
CA Abhishek Dugar
caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
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Dear Sir,

You can file ITR -1 and claim your refund. But make sure that your company does not declare your Swiss Income as Indian Income in your Form 16.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
719 Answers
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You need to file your return in international taxation ward. You can approach the IT office and get help from there.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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