CBDT
Shri O.P. Srivastava on behalf of India and Dr. Herbert Traxl
Ambassador of Austria in India on behalf of Austria.
With the signing of the above document the revised Convention shall
become applicable in India from April 1st 2002 and in Austria from January 1st 2002. It
will cover Income Tax in the case of India and Income Tax as well as the Corporation Tax
in the case of Austria. The Convention and Protocol seeks to provide a fresh impetus to
the mutual flow of investment technology trade and services between the two countries.
To avoid the incidence of double taxation India shall give credit for
taxes paid by its residents in Austria on the doubly taxed income while Austria will
exempt the income which is taxable in India under the provisions of this Convention. Other
salient features of the Convention and Protocol are as under:-
The Convention largely provides for lower rates of taxation
vis-…-vis the prevalent rates in the two countries. Under the Convention the position
of taxation in India in the case of dividend interest royalties and fees for technical
services can be seen form the chart below:-
| S.N. |
Category of Payments |
Rates in domestic law |
Rates in the Convention |
| 1. |
Dividends |
------- |
10% |
| 2. |
Interest |
20% |
10% |
| 3. |
Royalties |
20% |
10% |
| 4. |
Fees for Technical Services |
20% |
10% |
The Articles on taxation of dividends, interest,
royalties fees for technical services and capital gains are similar to those recently
concluded between India and other countries in so far as the rates of tax and scope are
concerned.
RS/BY/BTP/GN |
