I have a residential property which comprises of two flats combined into one house with two seprate agreements. Do i consider both flats as a single flat and pay no wealth tax or pay tax on one flat. Please reply.
Re: wealth tax query
by Suresh Mangnale on Apr 11, 2009 04:13 PM
Seperate two flats though it is combined as per rule you have to pay seperate taxes on each flat
I have worked 7 years with a group organisation (1 year in company A and 5 years in company B). I will be resigning and going abroad for further studies. The two companies are separate but my continuity of service is recognised for PF, Superannuation and Gratuity. I have not transferred the PF balances from company A to company B, so I have 2 PF and Superannuation numbers. I am planning to withdraw my Provident Fund amount. As I have completed 5 years, this will not be taxed, or is it better not to withdraw? In which case what happens. For superannuation, there is an option to commute portion of it - with pguaranteed pensions for 5, 15, 20 years, life thereafter, pension paid out over life of member and cease after death etc. What are the advantages of each option? IS it better to commute or not? If I decide to leave it, how will I receive the money. If I withdraw superannuation, is it liable to tax. I am also eleigible for grautity, will this also be taxed? Please advise what are the best options and how to proceed with companies A and B.
The point made in the above write up is that, India does not permit what's called pooling of foreign tax credits. This is not correct. Some of the Indian double taxation avoidance treaties allow such credit, as explained below:
Singapore: The provision is reciprocal. The pooling of foreign tax credit is allowed in both the countries. Not only India allows credit of income tax payable, because of doctrine of tax sparing, but credit of underlying tax paid by the distributing Singaporean company (and vice versa) is also permitted. To avail this benefit, the Indian company should hold 25% or more of share capital in the Singapore company
Mauritius: The provision is not only reciprocal, but more liberal. The pooling of foreign tax credit is allowed in both the countries. Not only India allows credit of income tax payable, because of doctrine of tax sparing, but credit of underlying tax payable (contrast only credit of tax paid in Singapore) by the distributing Mauritius company (and vice versa) is also permitted. To avail this benefit, the Indian company should hold only as low as 10% or more of share capital in the Mauritius company Thus, benefit of tax sparing is available not only in respect of tax payable directly by the company, but also in respect of underlying tax payable.
The benefit of pooling is not available, if the investment is made directly from India in US, UK, China. If the investment is routed via Singapore or Mauritius, this benefit could be availed.
S.N.Bhargava Former member of Indian Revenue Service S_bhargava2005@rediffmail.com
