NEW DELHI: The Government is not bound under the Right to Information law to divulge details about its Income Tax scrutiny policy, used to identify tax payees before subjecting them to detailed investigation.  

The Central Information Commission held this while accepting the Finance Ministry’s view that revealing information related to the scrutiny guidelines would adversely affect economic interests of the country.

“The Finance Ministry at the highest level has analyzed the whole issue and has given its considered opinion about the possible effect of disclosure on economic interest of the State,” a CIC bench headed by Chief Information Commissioner Wajahat Habibullah said

The order came on an RTI application of Kamal Anand who sought details from Central Board of Direct Taxes about its instructions issued to I-T assessment officers on scrutiny policy for financial year 2006-07, while also claiming a copy of the policy guidelines for individual tax payers.

The matter, that was taken with the Commission following CBDT’s refusal to provide the details, was thereafter referred to the Department of Revenue within the Finance Ministry for its views.

In its submissions before the CIC, the Finance Ministry had said that divulging details about the scrutiny guidelines would affect India’s economic interests by making it easy for unscrupulous tax payers to evade taxes.

It was said that the guidelines were meant for use by I-T assessment officers to enforce compliance of tax-payers’ liability, and hence there was no public interest attached to such disclosures.


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  1. Sri says:

    I have worked in UK on deputation for 4 months in the financial year 2009-2010 and I have paid tax for the income that I have earned in UK to UK Income tax as per UK Income tax rules and also filed returns in UK. But, while filing my India income tax returns in India, the company that preparing my tax returns, added my UK salary also to India salary. When I have asked for clarification, they replied that as u stayed more than 182 days in India in this fiscal year, you may need to pay the tax for global income. Do I really need to pay tax in India and UK as well for the same salary? Please clarify me
    Thank you

  2. Suresh Kumar says:

    Is this is appropriate answer of above query?
    DTAA with UAE-:

    Article 15 – Dependent personal services – 1. Subject to the provisions of Articles 16, 17, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State . If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

    2. Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

    (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant “previous year” or “year of income”, as the case may be ; and

    (b) the remuneration is paid by, or on behalf on, an employer who is not a resident of the other State ; and

    (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

    3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State.

    Case :-

    Taxability of services rendered abroad

    An employee who goes on deputation abroad would do well to look at the DTAA between India and the foreign country to gauge the tax impact.

    T. C. A. Ramanujam

    Information technology (IT) companies invariably send their employees from India to other countries for short-duration service. Questions arise about the taxability of salary earned for services rendered abroad. Apparently, it appears that if the services are rendered abroad and the person concerned has not been in India for more than 182 days in a fiscal year, he will become a non-resident and salary attributable to foreign service will not attract Indian income-tax. This issue came up in the British Gas India (P) Ltd (287 ITR 462) case.

    The Authority for Advance Ruling (AAR) held that the salary will not be taxable in India if the same has been offered for tax in the UK and tax need not be deducted at source in India by the Indian company. It was also held that if a person leaves India for employment, he will become a non-resident.

    The Mohan case

    As per the facts of this case (294 ITR 177 AAR), Mohan was employed with HCL, New Delhi , from April 1, 2005 to May 10, 2005. He then shifted to Infosys Technologies, Bangalore , and worked with the company from May 16, 2005 to March 31, 2006. Infosys sent him on deputation to Norway . He worked there for more than 182 days and became a non-resident for the financial year ending March 31, 2006. In the return for the assessment year 2006-07, he disclosed the income by way of salary from the employers in India . Tax was duly deducted at source and paid in India .

    In the return he filed, Mohan did not claim exemption. Familiar with the decision in the British Gas India (P) Ltd case, Mohan filed an application before the AAR contending that the salary paid by Infosys to a non-resident employee for rendering services outside India was not taxable in India in view of the Double Taxation Avoidance Agreement (DTAA) between India and Norway .

    It was argued that he was not legally liable to pay Indian income-tax, even though he received the salary income in India and in rupees for the services rendered by him in Norway for a period exceeding 182 days during the financial year.

    The AAR looked into the Indo-Norwegian DTAA. According to Article 25(2) of the treaty, where an Indian resident derives income, which may be taxed in Norway , India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Norway .

    The question before the AAR was whether the salary paid by the employer in India is taxable in India , though the assessee is a non-resident in India during the relevant financial year. It was admitted that the assessee did not pay any tax in Norway . The AAR looked into Articles 16(1) and 16(2) of the DTAA.

    As per Article 16(1), if the employment is exercised outside India , the remuneration derived therefrom “may be taxed” in Norway . It was open to Norway to subject remuneration received by Mohan to tax. Norway could have taxed the assessee. But he was not so taxed. Under Article 16(2), such remuneration “shall be taxed” in Norway if the duration of stay in Norway did not exceed 182 days.

    ‘May be’, ‘shall be’

    The AAR observed that there is a distinction between “may be taxed” and “shall be taxed”. Article 16 was excluded for the reason that stay in Norway was for a period exceeding 182 days in the financial year 2005-06.

    The AAR referred to the commentary on the OECD Model Convention and pointed out that the right of taxation is available under Article 16(1) to both Norway and India in regard to the employment income of Mohan in accordance with the Indian tax laws. He did not produce any proof to show that Norway had subjected him to tax or that he made any payment to the State of Norway on account of income-tax.

    In this situation, the AAR decided the case against the assessee and held that the salary paid by Infosys in India for services rendered in Norway was taxable in India though the assessee was a non-resident of India during the relevant financial year.

    DTAA important

    The importance of this Ruling arises from the fact that every employee who goes on deputation abroad should look at the DTAA between India and the foreign country.

    In the instant case, if the assessee had voluntarily paid the income-tax on the salary attributable to services in Norway to the Norwegian Government, he would have escaped the Indian income-tax.

    Obviously, in this case, it was favourable for him not to pay tax to Norway . There may be countries where the tax rate is lower and, therefore, more favourable to the employee. In such cases, the salaried employee sent out on deputation should look into the DTAA and pay the tax abroad if he wants to avoid Indian income-tax.

    (The author is a former Chief Commissioner of Income-Tax.)

  3. Suresh Kumar says:

    A person was posted in Dubai and working with a PSU whose HQ is in Delhi. He was posted in Dubai since 1997 and retired in October 2007. No tax was leviable in Dubai on the salary paid or accrued in Dubai as per Dubai local laws. No salary & allowances were paid to him in India during his posting to Dubai. Now the payment towards wage revision arrears becomes due to him for the period 01.01.07 to 24.10.07 which will be paid in India in INR.
    Kindly advice the wage arrear paid to him in India in INR are taxable in India for the services rendered outside India.

  4. lucky says:

    short term capital gains 3,00,000 arising from sale of shares for current year 2009-2010 how much money i save my income tax . i have no home loan . my source of income is only share market
    can i save my income tax thru ELSS schemes or any other sources

    from lucky

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