HOW TO CALCULATE RELIEF U/S 90 OR 91
THANKS & REGARDS
by Ashish M on 03 September 2009
1. First include the income earned and taxed in the forieng country along with the income earned in india.
Eg. - In case of Resident individual.
Income earned from foreign = 200000 (tax paid there = Rs.50,000)
TAx on total income = 118450
Less: relief u/s 90 = 33840
Tax payable 84610/-
by Debashis Mandal on 03 September 2009
Respected Friend ARUNA & ASHISH
ARUNA u asked about Sec.90 ie Taxation of Income where DTAA exist, it is always possiable where 2 countries have a Bilateral Agreement between them, so in that case 2 things may happen - 1. whether such country has got any Bilateral Agreement with India or not, If they have then just go through such agreement & treat the tax matter as per the agreement, where tax is to be charged in India at a reduced rate which is called Tax Exemption Method or 2. u may have Tax Credit Method which is as fllows,
First Compute Total Income as per Income Tax Act 1961
Last from such Income so computed allow relief as per the
terms of the Tax treaty.
Ashish, the soln. u given is v.good but as per my knowledge it is a treatment U/S 91 of Indian Income Tax Act. 1961 where u do not have a Bilateral Agreement & an unilateral agreement is followes & on that basis without any agreement with any other country a relief is given to the assessee as per the method u have shown to us.
I think reders r all superior brains then me so if any improvement is comming then I personally would be greatful to them.
Thanks to everyone.
by SANTANU CHATTERJEE on 13 August 2010
Your note on the calculation of relief U/S 90 is of immense importance and help. A real useful post. I have a querry on this. I would like to ask it if you do not mind. I learnt from the officials of the IT Department that there is a procedure for calculating the same as follows:
Considering your example of 5lacs & 2lacs the relief amt will come to be something around Rs. 14,286.00 on that basis.
Looking forward to hearing from you and/or any other tax expert
by nishant maheshwari on 05 November 2012