DIVIDEND FROM DTAA NATIONS NOT TAXABLE: SC

The Supreme Court has upheld that dividend income received from a foreign company is not liable for taxation when there is a Double Taxation Avoidance Agreement (DTAA) with the country, the firm is based in. The court has endorsed the finding that the provisions of the DTAA will override the provisions of the Income Tax Act if they are at variance. In Case of Turquoise Investment & Finance, it was held that from a plain reading of Article XI of the DTAA with malasiya, it was clear that dividend income would be taxed only in the contracting states where such income accrued.