Article 24 - Elimination of Double Taxation - Israel

Article 24 ELIMINATION OF DOUBLE TAXATION 1. Subject to the laws of Israel from time to time in force regarding the allowance as a credit against Israeli tax or tax paid in any country other than Israel (which shall not affect the general provision contained in this paragraph), Indian tax paid in respect of income derived from or capital owned in India shall be allowed as a credit against Israeli tax payable in respect of that income or capital. The credit shall not, however, exceed that portion of Israeli tax which the income or capital from sources within India be as to the entire income or capital, as the case may be, subject to Israeli tax. 2. Where a resident of India derives income or owns capital which, in accordance with the provisions of this convention, may be taxed in Israel, India shall allow : (a) as a deduction from the tax on the income of that resident, an amount equal to the income-tax paid in Israel, whether directly or by deduction. (b) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Israel. Such deduction in either case shall not, however, exceed that part of the income-tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Israel. 1 [****] 5. Where in accordance with any provision of the Convention income derived or capital owned by a resident of a contracting State is exempt from tax in that State, such State 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. ********* NOTES:- 1. Omitted vide NOTIFICATION NO. 10/2017 dated 14-02-2017 before it was read as, 3. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, where a resident of a Contracting State derives income by way of dividends on shares of companies resident in the other Contracting State, the first-mentioned Contracting State, shall allow credit of 15 per cent of the gross amount of such dividend from the tax payable. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this article, where a resident of a contracting State derives income by way of interest from any source in the other contracting State, the first-mentioned contracting State shall allow a credit of 10 per cent of the gross amount of such interest from the tax payable.