ARTICLE 24
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.
2. Subject to the provisions of the law of India regarding the allowance as a credit against
Indian tax of tax paid in a territory outside India (which shall not affect the general principle
hereof), the amount of the United Kingdom tax paid, 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.
3. Subject to paragraph (5) of this Article, for the purposes of paragraph (1) of this Article the
term "Indian tax payable" shall be deemed to include:
a) 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 in question under the provisions of the Income-tax Act 1961 (43 of 1961)
referred to in paragraph (4)(a) or (b) of this Article;
b) that proportion of any amount which would have been payable as Indian tax by a
resident of India but for a deduction allowed in computing the taxable income or an
exemption or reduction granted for the year in question under the provisions of the
Income-tax Act 1961 (43 of 1961) referred to in paragraph (4)(c) of this Article
which corresponds to the proportion of that resident's total production in that year
which was actually sold in the Indian Domestic Tariff Area under Orders issued by
the Chief Controller of Imports and Exports bearing Nos. 21/90-93, 22/90-93, 23/90-
93, 25/9093, 26/90-93, 27/90-93 dated 30th March 1990 and similar Orders from time
to time published in the Official Gazette by the Central Government under power
conferred to it by Section 3 of the Import and Export (Control) Act, 1947 (18 of
1947).
4. The provisions referred to in this paragraph are:
a) sections 10(4), 10(4B), 10(6)(viia), 10(15)(iv), 33AB, 80HHD, 80I and 80IA; (b) any
other provision which may subsequently be enacted 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 to a provision referred to in
subparagraph (a) of this paragraph, if it has not been modified thereafter or has been
modified only in minor respects so as not to affect its general character; (c) sections
10A and 10B.
5. Relief from United Kingdom tax shall not be given by virtue of this paragraph (3) of this
Article in respect of income from any source if the income relates to a period starting more
than 10 fiscal years after the deduction in computing taxable income or 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.
6. 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.
7. 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.