Article 24 - Elimination of double taxation - Malta (Old - Effective upto 1-4-2015)

Chapter IV - Elimination of double taxation Article 24 - Elimination of double taxation - 1. The laws in force in either of the Contracting States shall continue to govern the taxation of income in the respective Contracting States except where express provision to the contrary is made in this Agreement. 2. In the case of India, double taxation shall be eliminated as follows : Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Malta, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Malta whether directly or by deduction. Such deduction in either case shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable, as the case may be, to the income which may be taxed in Malta. 3. For the purposes of paragraph (2), the term income-tax paid in Malta shall be deemed to include the amount of Malta tax which would, under the laws of Malta and in accordance with this Agreement, have been payable on any income derived from sources in Malta had the income not been taxed at a reduced rate or exempted from Malta tax in accordance with : (a) the Aids to Industries Ordinance, 1959 and the Industrial Development Act, 1988 insofar as they were in force on, and have not been modified since, the date of signature of this Agreement or have been modified only in minor respects so as not to affect their general character ; or (b) any other provisions in the Income-tax Act (Cap. 123) or in any other legislation which may subsequently be introduced in Malta in modification of, or in addition to, the existing special incentive laws so far as they are agreed by the competent authorities of the Contracting States to be of a substantially similar character. 4. In the case of Malta, double taxation shall be eliminated as follows : Subject to the provisions of the law of Malta regarding the allowance of a credit against Malta tax in respect of foreign tax, where in accordance with the provisions of this Agreement, there is included in a Malta assessment income from sources within India the Indian tax on such income shall be allowed as a credit against the relative Malta tax payable thereon. 5. For the purposes of the deduction referred to in paragraph (4), the term Indian tax on such income shall be deemed to include any amount which would have been payable as Indian tax under the laws of India and in accordance with this Agreement for any year but for an exemption from, or reduction of, tax granted for that year under : (a) Sections 10(4), 10(4B), 10(6)(viia), 10(15)(iv), 10A, 10B, 80(1A), 80HHC, 80HHD, 80HHE 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 the signature of this Agreement, or have been modified only in minor respects so as not to affect their general character ; or (b) any other provisions which may be enacted hereafter granting a deduction in computing the taxable income or an exemption or reduction from tax which the competent authorities of the Contracting States agree to be for the purposes of the economic development of India, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character. 6. Where the Agreement provides that income arising in a Contracting State shall be relieved from tax in that State, either in full or in part, and, under the law in force in the other Contracting State, such income is subject to tax by reference to the amount thereof which is remitted to or received in that other State and not by reference to the full amount thereof, then the relief to be allowed in the first-mentioned State shall apply only to so much of the income as is remitted to or received in the other State. 7. Income which, in accordance with the provisions of this Agreement, 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.