DT9553 - India: Notes

Students, trainees and researchers (Article 21)

Visiting students, trainees and researchers from India are exempt from UK tax on gifts from abroad for the purpose of their maintenance, education, study, research or training and on certain grants and awards.

In all cases, the exemption is limited to five years for any given individual.

Visiting individuals from India who participate in a study, research or training programme sponsored by the UK Government are also exempt from UK tax for up to twelve months on payments made by the Indian government for the purpose of their maintenance, study, research or training.

Teachers (Article 22)

An individual who visits the UK for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college or other recognised educational institution in the UK, and who was immediately before that visit a resident of India, shall be exempted from tax in the UK on any remuneration for such teaching or research for a period not exceeding two years from the date they first visit the UK for such purpose.

This only applies to income from research that is undertaken in the public interest and not primarily for the benefit of some other private person.

Tax spared (Article 24(4))

The convention provides for credit to be given for tax ‘spared’ (see INTM161270-161280) in India under the provisions of Indian law listed in Article 24(4).

Section 80-IB of the Indian Income Tax Act 1961 has been agreed to be of a substantially similar character to the provisions listed in Article 24(4(a)), and so credit is also due for tax spared under that provision.

Section 80-IC of the Indian Income Tax Act 1961, inserted by the Finance Act 2003, is not agreed as being substantially similar to those provisions referred to in Article 24(4)(a) and no credit will be due in respect of tax spared under that Section.

Relief is restricted to tax spared in India for a period of ten years in respect of any one source of income.

Amounts of tax spared for which credit relief is given should be reported as mentioned in INTM161290.