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HMRC internal manual

Double Taxation Relief Manual

India: Tax spared

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

Section 80-IB of that Act has been agreed to be of a substantially similar character to the provisions in paragraph 4(a), and credit is due by virtue of Article 24(4)(b)..

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.