Taxes levied in foreign countries on profits or gains is deductible u/s 37(1)

Due consideration of the provisions of s.37 and s.40(a)(ii) of the Act as well, it emerges that u/s 37, all taxes and rates are allowable irrespective of the place where they are lived i.e., whether on Indian soil or offshore, whereas u/s 40(a)(ii) of the Act, income-tax which is a tax leviable on the profits and gains chargeable under the Act is deductible.

On the other hand, all other taxes levied in foreign countries whether on profits or gains or other wise are deductible under the provisions of s. 37 of the Act and paymen

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