When Your Employer Pays Your Tax: Can There Be Tax on Tax on Tax?
Direct Tax · 5 min read Suppose your employer promises you ₹100 after tax and agrees to bear the tax for you. At a 30% tax rate, the tax on that salary is ₹30. Normally, that ₹30 would have been your obligation, but because your employer pays it for you, section 17(2)(iv) comes into play. […]
ESOPs Earned Abroad: Is the Cost of Acquisition Nil if the Perquisite Was Not Taxed in India?
International Tax · 3 min read For a non-resident employee who receives ESOPs of an Indian company while working abroad, what is the cost of acquisition when the shares are later sold: the exercise price actually paid, or the fair market value (FMV) on the exercise date under section 49(2AA)? And does the answer change […]
Can You Claim Foreign Tax Credit for Both Federal and State Taxes Paid in the USA?
International Tax · 4 min read The India–US DTAA covers only US Federal income tax. So what happens to income taxes paid to an individual US State: can foreign tax credit be claimed for those too in India? The Karnataka High Court addressed this in Wipro Ltd. v. DCIT, [2016] 382 ITR 179 (Karn.). Its […]