If you are an Indian resident working overseas or having income outside India, then your global income will be taxable in India.  Income earned outside India shall also be taxed in India even though your foreign income is also taxable in that foreign country. To avoid the double taxation of such foreign income, the act provides the relief to the assessee. The central government enter into an agreement i.e. Double Taxation Avoidance Agreement (DTAA) with the government of other country or territory outside India to grant relief in respect of double taxability.

In case DTAA with foreign country exists

If DTAA agreement exists between India and that foreign country from which the assessee earned such foreign income, and then the total income of the assessee shall be taxed at the DTAA rate or the Income tax rate, whichever is beneficial to the assessee.

In case DTAA with foreign country does not exists

In such case, the assessee shall be entitled to the deduction of Indian income tax paid on total income including such foreign income or tax deducted or paid in foreign country in respect of income earned in that country, whichever is lower from the Indian income tax payable on total income including such foreign income.

In case of non-resident individual in India, income which accrue or arise or deemed to be accrues or arise in India during the previous year or income received or deemed to be received in India during the previous year shall be taxed in India as per the act. Foreign income earned in by a non resident shall not be taxed in India.

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