n NISM Certifications
X NISM Series X
Medium

How should income earned by an offshore investor in an AIF be taxed if the applicable tax rate is 25% and the DTAA rate is 20%?

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Average rate of 22.5%

  2. B

    25%

  3. C

    20%

  4. The withholding tax rate as applicable

    Correct answer

Why this is the answer

Taxation depends on the prevailing rate specified in the Income Tax Act and the applicable DTAA; the actual withholding tax rate applies accordingly.

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