Article 24 - Elimination of double taxation - Finland (Old - Effective upto 31-3-2011)

ARTICLE 24 - Elimination of double taxation - 1. In Finland, double taxation shall be eliminated as follows : (a)Where a resident of Finland derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in India, Finland shall, subject to the provisions of sub-paragraph (b), allow : (i)as a deduction from the tax on income of that person, an amount equal to the tax on income paid in India, (ii)as a deduction from the tax on capital of that person, an amount equal to the tax on capital paid in India. Such deduction in either case shall not, however, exceed that part of the tax on income or on capital, as computed before the deduction is given, which is attributable, as the case may be, to the income of the capital which may be taxed in India. (b)Dividends paid by a company being a resident of India to a company which is a resident of Finland and which controls directly at least 10 per cent of the voting power in the company paying the dividends shall be exempt from Finnish tax. (c)Notwithstanding any other provision of this Convention, an individual who is a resident of India and under Finnish taxation law with respect to the Finnish taxes referred to in article 2 also is regarded as a resident of Finland may be taxed in Finland. However, Finland shall allow any Indian tax paid on the income or the capital as a deduction from Finnish tax in accordance with the provisions of sub-paragraph (a). The provisions of this sub-paragraph shall apply only to nationals of Finland. (d)Where in accordance with any provisions of the Convention, income derived or capital owned by a resident of Finland is exempt from tax in Finland, Finland may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital. (2) For the purposes of paragraph 1, taxes paid in India 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(5B), 10(15)(iv) and 80-IA of the Income-tax Act, 1961 so far as they are in force or as modified only in minor respects so as not to affect their general character; or (b)any other provisions which may subsequently be enacted granting an exemption or reduction from tax which is agreed to by the competent authorities of the two contracting States. (3) In India double taxation shall be eliminated as follows: (a)The amount of Finnish tax payable, under the laws of Finland and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of India, in respect of income which has been subjected to tax both in India and Finland 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. (b)For the purposes of the credit referred to in sub-paragraph (a) above, where the resident of India is a company by which surtax is payable, the credit to be allowed against the 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 : Provided that income which in accordance with the provisions of this convention is not to be subjected to tax may be taken into account in calculating the rate of tax to be imposed.