Tax queries: DTAA can give tax relief if payable in multiple jurisdictions

I am a foreign resident working with a company at its UK Office as a software engineer. During the period from April 1, 2015 to March 31, 2018, I worked in India on some projects. I stayed in India for more than 189 days during each of these years. I was paid salary in India and UK. I have filed my tax returns in India based on number of days stayed in India. I returned to UK on April 1, 2018. I received incentive from my employer on November 2, 2018 for work done from April 1, 2016, to March 31, 2018. Do I have to pay any tax in India? I have no bank account nor any relation with India. —SURAJ KUMAR

The incentives received by you relate to the period you worked in India, hence the said income will be considered as sourced in India irrespective of the place of receipt. I understand during the period April 1, 2015 to March 31, 2018 your period of stay was more than 182 days in each of the financial years and accordingly your residential status would have been resident, however I will require additional facts to determine your residential status as resident and ordinarily resident or not ordinarily resident. If your residential status is resident and ordinarily resident, a view can be taken that the said income will be chargeable to tax in India as it pertains to income sourced in India. In such case if you are subject to tax in both the countries, you will be able to be entitled to claim the relief as per the provision of India-UK Double Taxation Avoidance Agreement (DTAA).

I had purchased share of one listed company in stock market. The purchase price was Rs 2 per share. In two years the price rose to Rs 59. I sold in the market and earned capital gain and claimed exemption. During assessment the Assessing Officer said that the company is classified as penny stock and disallowed claim of capital gains tax. Is he justified? —MANISH MEHTA


If you have purchased the shares on the floor of exchange through the registered broker by paying securities transaction tax and similarly sold such shares and you have no role in price fluctuation then your claim cannot be denied even if there is allegation of price rigging in that scrip. You can also further produce evidence of source from which such investment is made and bank statement highlighting the transaction. You may rely on the recent ruling of Mumbai Tribunal in case of Ramprasad Agarwal versus ITO reported in 100 taxmann.com 172.


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