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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 24

Methods for Elimination of Double Taxation

(1) In India double taxation shall be eliminated as follows:

  • (a) Where a resident of India derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Luxembourg, India shall allow as a deduction from the tax on the income or capital of that resident, an amount equal to the tax paid in Luxembourg.
  • Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income or capital which may be taxed in Luxembourg.
  • (b) Where in accordance with any provision of the Agreement income derived or capital owned by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

(2) Subject to the provisions of the law of Luxembourg regarding the elimination of double taxation which shall not affect the general principle hereof double taxation shall be eliminated as follows:

  • (a) Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in India, Luxembourg shall, subject to the provisions of sub-paragraphs (b) and (c), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not been exempted.
  • (b) Where a resident of Luxembourg derives income which, in accordance with the provisions of Articles 10, 11, 12 and 17 may be taxed in India, Luxembourg shall allow as a deduction from the Income-tax on individuals or from the corporation tax of that resident an amount equal to the tax paid in India. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from India.
  • (c) The provisions of sub-paragraph (a) shall not apply to income derived or capital owned by a resident of Luxembourg where India applies the provisions of this Agreement to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10, 11 or 12 to such income.