Article 22 - Elimination of double taxation - Great Britain and Northern Ireland (Old - Effective upto 10-02-1994)

ARTICLE 22 Elimination of double taxation 1. Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof): (a) Indian tax payable under the laws of India and in accordance with the provisions of this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within India (excluding, in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Indian tax is computed. (b) In the case of a dividend paid by a company which is a resident of India to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent. of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Indian tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Indian tax payable by the company in respect of the profits out of which such dividend is paid: Provided that this paragraph shall not apply to a company which is a resident of the United Kingdom and is a petroleum company as defined for the purposes of Schedule 9 to the Oil Taxation Act, 1975. 2. Subject to the provisions of the law of India regarding the allowance as a credit against Indian tax of tax payable in a territory outside Indian (which shall not affect the general principle hereof), the amount of United Kingdom tax payable, under the laws of the United Kingdom and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of India, in respect of income from sources within the United Kingdom which has been subjected to tax both in India and the United Kingdom shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax. In no case shall credit for United Kingdom tax be given against the additional income-tax on undistributed income of companies. For the purposes of the credit referred to in this paragraph, where the resident of India is a company by which surtax is payable, the credit to be allowed against Indian tax shall be allowed in the first instance against the income-tax payable by the company in India and as to the balance, if any, against the surtax payable by it in India. 3. For the purposes of paragraph 1 of this Article the term ' Indian tax payable ' shall be deemed to include any amount which would have been payable as Indian tax but for a deduction allowed in computing the taxable income or an exemption or reduction of tax granted for that year under: (a) sections 10(4), 10(4A), 10(6)(viia), 10(15)(iv), 32A, 33A, 35B, 35CC, 80HH, 80J and 80K of the Income-tax Act, 1961 (43 of 1961), so far as they were in force on and have not been modified since the date of signature of this Convention or have been modified only in minor respects so as not to affect their general character; or (b) any other provision which may subsequently be made granting an exemption or reduction from tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character: Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income relates to a period starting more than 10 fiscal years after the exemption from, or reduction of, Indian tax is first granted to the resident of the United Kingdom or to the resident of India, as the case may be, in respect of that source. 4. Income which in accordance with the provisions of this Convention is not to be subjected to tax in a Contracting State may be taken into account for calculating the rate of tax to be imposed in that Contracting State on other income. 5. For the purposes of paragraphs 1 and 2 of this Article profits, income and chargeable gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with the provisions of this Convention shall be deemed to arise from sources in that other Contracting State. 6. Where profits on which an enterprise of a Contracting State has been charged to tax in that State are also included in the profits of an enterprise of the other State and the profits so included are profits which would have accrued to that enterprise of the other State if the conditions made between the enterprises had been those which would have been made between enterprises dealing wholly independently with each other, the amount included in the profits of both enterprises shall be treated for the purposes of this Article as income from a source in the other State of the enterprise of the first-mentioned State and relief shall be given accordingly under the provisions of paragraph 1 or paragraph 2 of this Article. 7. For the purposes of this Article the term in accordance with the provisions of this Convention shall include taxes which are the subject of this Convention and imposed on income not expressly mentioned in the Convention.