1. This Convention shall apply to persons who are residents of one or both of the contracting states.

Taxes Covered

The taxes, which are the subject of this Convention, are:

(a) In the United Kingdom:

1. The Income-tax;

2. The Corporation tax;
3. The Capital gains tax; and
4. The petroleum revenue tax;

b) In India

The income tax including any surcharge thereon.

Fiscal Domicile

1) For the purposes of this Convention, the term "resident of a contracting state" means any person who, under the law of that State is Iiable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature.

2) Where by reason of the provisions of paragraph (1) of this Article an individual is a resident of both contracting states, and then his status shall be determined in accordance with the following rules:

(a) He shall be deemed to be a resident of the contracting state in which he has a permanent home available to him. If he has a permanent home available to him in both contracting states, he shall be deemed to be a resident of the contracting state with which his personal and economic relations are closer (centre of vital interests);

(b) If the contracting state in which he has his centre of vital interests cannot be determined, or ii he has not a permanent home available to him in either contracting state, he shall be deemed to be a resident of the contracting state in which he has an habitual abode;

(c) If he has an habitual abode in both contracting states or in neither of them, he shall be deemed to be a resident of the contracting state of which he is a national;

(d) If he is a national of both contracting states or of neither of them, the competent authorities of the contracting states shall settle the question by mutual agreement.

(3) Where by reason of the provisions of paragraph (1) of this section a person other than an individual is a resident of both contracting states, then it shall be deemed to be a resident of the contracting state in which its place of effective management is situated.

Permanent Establishment

1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
2. The term "permanent establishment" shall include especially;

1. A place of management;
2. A branch;
3. An office;
4. A factory:
5. A workshop;
6. Premises used as a sales outlet or for receiving or soliciting orders;
7. A warehouse in relation to a person providing storage facilities for others;
8. A mine, an oil or gas well, quarry or other place of extraction of natural resources:
9. An Installation or structure used for the exploration or exploitation of natural resources:
10. A building site or construction, installation or assembly project or supervisory, activities in connection therewith, where such site project or supervisory activity continues for a period of more than six months, or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or supervisory activity exceed 10 per cent of the sale price of the machinery and equipment;
11. The furnishing of Services including managerial services, other than those taxable under the section "Royalties and fees for technical services." within a contracting state by an enterprise through employees or other personnel, but only if:

1. Activities of that nature continue within that State for a period or periods aggregating more than 90 days within any twelve month period; or
2. Services are performed within that State for an enterprise within the meaning of paragraph 1 under section "Associated enterprises" and continue for a period or periods aggregating more than 30 days within any twelve- month period;

Provided that for the purposes of this paragraph an enterprise shall deemed to have a permanent establishment in a contracting state and to carry on business through that permanent establishment if it provides vices or facilities in connection with, or supplies plant and machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oils in that State.

(3) The term "permanent establishment" shall not be deemed to include;

1. The use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
2. The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
3. The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
4. The maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;
5. The maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information or for scientific research, being activities solely of a preparatory or auxiliary character in the trade or business of the enterprise. However, this provision shall not be applicable where the enterprise maintains any other fixed place of business in the other contracting state for any purpose or purposes other than the purposes specified in this paragraph;
6. The maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e) above, provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

(4) A person acting in a contracting state for or on behalf of an enterprise of the other contracting state, other than an agent of an independent status to whom paragraph (5) of this section applies, shall be deemed to be a permanent establishment of that enterprise in the first mentioned state if:

1. he has, and habitually exercises in that State, an authority to negotiate and enter into contracts for or on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or
2. he habitually maintains in the first-mentioned contracting state a stock of goods or merchandise from which he regularly delivers goods or merchandise for or on behalf of the enterprise; or
3. he habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises controlling, controlled by, or subject to the same common control, as that enterprise.

(5) An enterprise of a contracting state shall not be deemed to have a permanent establishment in the other contracting state merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. However, if the activities of such an agent are carried out wholly for the enterprise (or for the enterprise and other enterprises which are controlled by it or have a controlling interest in it or are subject to same common control) he shall not be considered to be an agent of an independent status for the purposes of this paragraph.

(6) The fact that a company which is a resident of the other contracting state controls or is controlled by a company which is a resident of the other contracting state, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

(7) For the purposes of this article the term "control", in relation to a company, means the ability to exercise control over the company's affairs by means of the direct or indirect holding of the greater part of the issued share capital or voting power in the Company.

Income from Immovable Property

(1) Income from immovable property may be taxed in the contracting state in which such property is situated.

1. (a) The term "immovable property" shall, subject to the provisions of sub-paragraph (b) of this paragraph, be defined in accordance with the law of the contracting state in which the property in question is situated.

(b) The term "immovable property" shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payment as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property.

2. The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

(4) The provisions of paragraphs (1) and (3) of this Article shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

Business Profits

(1) The profits of an enterprise of contracting state shall be taxable only in that State unless the enterprise carries on business in the other contracting state through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as are directly or indirectly attributable to that permanent establishment.

(2) Where an enterprise of a contracting state carries on business the other contracting state through a permanent establishment situated therein, the profits which that permanent establishment might be expected to make if it were a distinct and separate enterprise engaged the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is permanent establishment shall be treated for the purposes of paragraph (1) this Article as being the profits directly attributable to that permanent establishment.

(3) Where a permanent establishment takes an active part in negotiating, concluding or fulfilling contracts entered into by the enterprise then, notwithstanding that other parts of the enterprise have also participated in those transactions, that proportion of profits of the enterprise arising out of those contracts which the contribution of the permanent establishment to those transactions bears to that of the enterprise as a whole shall be treated for the purpose of paragraph (1) of this article being the profits indirectly attributable to that permanent establishment.

(4) Insofar as it has been customary in a contracting state according to its law to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraphs (1) and (2) of this Article shall preclude that contracting state from determining the profits to be taxed by such an apportionment as may be necessary: the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles laid down in this Article.

(5) Subject to paragraphs (6) and (7) of this Article, in the determination of the profits of a permanent establishment there shall be allow; as deductions expenses which are incurred for the purposes of the business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, which are allowed under the provisions of and subject to the limitations of the domestic law of the Contracting state in which the permanent establishment is situated.

(6) Where the law of the contracting state in which the permanent establishment is situated imposes a restriction on the amount of t] executive and general administration expenses which may be allowed and the restriction is relaxed or over-ridden by any Convention between that Contracting state and a third State which is a member of the Organisation for Economic Co-operation and Development or a State in comparable stage of development, and that Convention enters in force after the date of entry into force of this Convention the competent authority of that contracting state shall notify the competent authority of the other contracting state of the terms of the relevant paragraph in the Convention with that third State immediately after the entry into force of that Convention and, if the competent authority of the other contracting state so requests, the provisions of this Convention shall be amended by protocol to reflect such terms.

(7) Paragraph (5) of this Article shall not apply to amount if any paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any if its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other right, or by way of commission, for specific services performed or management, or, except in the case of a banking enterprise, by way of interest on monies lent to the permanent establishment of amount charged (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or except in the case of a banking enterprise, by way of interest on monies lent to the head office of the enterprise or any of its other offices.

(8) No profit shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

(9) Where profits include items of income, which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

(1) Profits derived from the operation of aircraft in international traffic by an enterprise of one of the contracting states shall not be taxed in the other contracting state.

(2) The provisions of paragraph (1) of this Article shall likewise apply in respect of participation in pools of any kind by enterprises engaged in air transport.

(3) For the purposes of this Article the term "operation of aircraft" shall include transportation by air of persons, livestock, goods or mail, carried on by the owners or lessees or charterers of aircraft, including the sale of tickets for such transportation on behalf of other enterprises, the incidental lease of aircraft on a charter basis and any other activity directly connected with such transportation.

(4) Gains derived by an enterprise of a contracting state from the alienation of Aircraft owned and operated by the enterprise, the income from which is taxable only in that State, shall be taxed only in that State.

1. Income of an enterprise of a contracting state, from the operation of ships in international traffic, shall be taxable only in that state.
2. The provision of paragraph (1) of this Article shall not apply to income from journeys between places, which are situated in a Contracting state.
3. For the purposes of this Article, income from the operation ships includes income derived from the rental on a bareboat basis of ship if such rental income is incidental to the income described in paragraph (1) of this Article.
4. Notwithstanding the provision of Article 7 (Business profits) of this Convention, the provisions of paragraphs (1) and (2) of this Article shall likewise apply to income of an enterprise of a contracting state; from the use, maintenance or rental of containers (including trailers al related equipment for the transport of containers) used for the transport of goods or merchandise.
5. The provisions of this Article shall apply also to income derived from participation in a pool, a joint business or an international operating agency.
6. Gains derived by an enterprise of a contracting state from the alienation of ships or containers owned and operated by the enterprise shall be taxed only in that State if either the income from the operation of the alienated ships or containers was taxed only in that State, or the ships or containers are situated outside the other contracting state at the time of alienation.

(1) Where:

(a) an enterprise of a contracting state participates directly or indirectly in the management, control or capital of an enterprise the other contracting state, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a contracting state; and an enterprise of the other contracting state and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

(2) Where a contracting state includes in the profits of an enterprise of that State--and taxes accordingly--profits on which an enterprise of the other contracting state has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises then that other State shall make an appropriate adjustment to the amount of the tax charged therein in those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the contracting states shall if necessary consult each other.

(1)

(a) A dividend paid by a company which is a resident of the United Kingdom to a resident of India may be taxed in India.

(b) Where under paragraph (2) of this Article, a resident of India is entitled to a tax credit in respect of that dividend, tax may also be charged in the United Kingdom and according to the laws of the United Kingdom on the aggregate of the amount or value of the dividend and the amount of the tax credit, at a rate not exceeding 15 per cent.

(c) Except as provided in sub-paragraph (b) of this paragraph, a dividend derived from a company which is a resident of the United Kingdom by a resident of India, who is the beneficial owner of that dividend, shall be exempt from any tax in the United Kingdom which is chargeable on dividends.

(2) An individual who is a resident of India and who receives a dividend from a company which is a resident of the United Kingdom shall, provided he is the beneficial owner of the dividend, be entitled to the tax credit in respect of that dividend which an individual resident in the United Kingdom would have been entitled to had he received that dividend, and to the payment of any excess of that tax credit over his liability to United Kingdom tax.

(3) A dividend paid by a company which is a resident of India to a resident of the United Kingdom may be taxed in the United Kingdom. The dividend may also be taxed in India but the Indian tax so charged shall not exceed 15 per cent of the gross amount of the dividend.

(4) The preceding paragraphs of this Article shall not affect the taxation of the Company in respect of the profits out of which the dividend paid.

(5) The provisions of paragraphs (1) and (2) or, as the case may be, paragraph (3) of this Article shall not apply if the beneficial owner the dividend, being a resident of a contracting state, has, in the other contracting state of which the Company paying the dividend is a resident a permanent establishment or fixed base with which the holding by virtue of which the dividend is paid is effectively connected. In such a case the provisions of Article 7 (Business profits) or Article 15 (Independent Personal Services) of this Convention, as the case may be, shall apply.

(6) Where a company which is a resident of a contracting state derives profits or income from the other contracting state, that other state may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other state insofar as the holding in respect of which the dividends are paid effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profit to a tax on the company's undistributed profits, even if the dividend paid or the undistributed profits consist wholly or partly of profits income arising in that other State.

(7) As used in this Article the term "dividend" means income from shares or other rights, not being debt-claims, participating in profits, well as income from other corporate rights treated in the same manner as income from shares by the taxation law of the State of which the company making the distribution is a resident and any other item treat as a dividend or distribution under that law.

(1) Interest arising in a contracting state and paid to a resident the other contracting state may be taxed in that other State.

(2) However, such interest may also be taxed in the contracting state in which it arises and according to the law of that State, provided that where the resident of the contracting state is the beneficial owner of the interest the tax so charged shall not exceed 15 per cent of the gross amount of the interest.

1. Notwithstanding the provisions of paragraph (2) of this Article

(a) Where the interest is paid to a bank carrying on a bona fide banking business which is a resident of the other contracting state and is the beneficial owner of the interest, the tax charged in the contracting state in which the interest arises shall not exceed 10 per cent of the gross amount of the interest;

(b) Where the interest is paid to the Government of one of the Contracting states or a political subdivision or local authority of that State or the Reserve Bank of India, it shall not be subject to tax by the state in which it arises.

(4) Notwithstanding the provisions of Article 7 of this Convention and of paragraphs (2) and (3) of this Article:

(a) Interest arising in India which is paid to and beneficially owned by a resident of the United Kingdom shall be exempt from tax in India if it is paid in respect of a Loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the United Kingdom Export Credits Guarantee Department; and

(b) Interest arising in the United Kingdom which is paid to and beneficially owned by a resident of India shall be exempt from tax in the United Kingdom if it is paid in respect of a loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the Export credits and Guarantee Corporation of India and/or Export-Import Bank of India.

(5) The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from Government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures but subject to the provisions of paragraph (9) of this Article, shall not include any item which is treated as a distribution under the provisions of Article 11 (Dividends) of this Convention.

(6) The provisions of paragraphs (1), (2) and (3) (a) of this Article shall not apply if the beneficial owner of the interest, being a resident of a contracting state, carries on business in the other contracting state in which the interest arises through a permanent establishment situated therein or performs in that other State Independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest, is paid is effectively connected with such permanent establishment or Axed base. In such case the provisions of Article 7 (business profits) or Article 15 (Independent personal services) of this Convention, as the case may be, shall apply.

(7) Interest shall be deemed to arise in a contracting state when the payer is that state itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the interest whether he is a resident of a contracting state or not has in a Contracting state a permanent establishment or a fixed base, then such interest shall be deemed to arise in the contracting state in which the permanent establishment or fixed base is situated.

(8) Where, owing to a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest paid exceeds for whatever reason the amount which would have been paid in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount in that case, the excess part of the payments shall remain taxable according to the law of each contracting state, due regard being had to the other provisions of this Convention.

(9) Any provision in the laws of either contracting state relating only to interest paid to a non-resident company shall not operate so to require such interest paid to a company which is a resident of the other contracting state to be treated as a distribution or dividend the company paying the interest. The preceding sentence shall not apply to interest paid to a company which is a resident of one of the Contracting states in which more than 50 per cent of the voting power is cc trolled, directly or indirectly, by a person or persons who are resident of the other contracting state.

(10) The relief from tax provided for in paragraph (2) of this Article shall not apply if the beneficial owner of the interest:

(11) The provision of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to take advantage of this Article by means of this creation assignment.

(1) Royalties and fees for technical services arising in a Contracting state and paid to a resident of the other contracting state may be taxed in that other state.

(2) However, such royalties and fees for technical services may also be taxed in the contracting state in which they arise and according to the law of that State; but if the beneficial owner of the royalties of fees for technical services is a resident of the other contracting state, the tax so charged shall not exceed;

(3) For the purposes of this Article, the term "royalties" means:

(4) For the purposes of Paragraph (2) of this Article, and subject to paragraph (5) of this Article, the term "fees for technical services" means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including the provision of services of technical or other personnel) which:

(5) The definitions of fees for technical services in paragraph (4) this Article shall not include amounts paid;

(d) for services for the private use of the individual or individual making the payment; or

(6) The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the royalties or fees for technical service being a resident of a contracting state, carries on business in the other contracting state, in which the royalties or fees for technical services arise through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situate therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case, the provision of Article 7 (Business profits) or Article 15 (Independent personal service) of this convention, as the case may be, shall apply.

(7) Royalties and fees for technical services shall be deemed to arise in a contracting state where the payer is that state itself, a political sub-division, a local authority or resident of that State. Where however, the person paving the royalties or fees for technical services, whether he is a resident of a contracting state or not, has in a contracting state a permanent establishment or a fixed base in connection with which the obligation to make payments was incurred and the payments are home by that permanent establishment or fixed base then the royalties or fees for technical services shall be deemed to arise in the contracting state in which the permanent establishment or fixed base is situated.

(8) Where owing to a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties or fees for technical services paid exceeds for whatever reason the amount which would have been paid in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each contracting state; due regard being had to the other provisions of this convention.

(9) The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the royalties or fees for technical services are paid to take advantage of this Article by means of that creation or assignment.

Except as provided in Articles 8 (Air transport) and 9 (Shipping) of this Convention, each contracting state may tax capital gains in accordance with the provisions of its domestic law.

Independent Personal Services

(1) Income derived by an individual, whether in his own capacity or as a member of a partnership, who is a resident of a contracting state in respect of professional services or other independent activities of a similar character may be taxed in that State. Such income may also be taxed in the other contracting state if such services are performed in that other state and if:

In each case only so much of the income as is attributable to those services.

(2) For the purposes of paragraph (1) of this Article an individual who is a member of a partnership shall be regarded as being present in the other State during days on which, although he is not present, another individual member of the partnership is so present and performs professional services or other independent activities of a similar character in that state.

(3) The term "professional services" includes independent scientific literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.

Dependent Personal Services

(1) Subject to the provisions of Article 17 (Directors' Fees), 18 (Artist and athletes), 19 (Governmental remuneration and pensions), 20 (pensions and annuities), 21 (Students and trainees) and 22 (Teachers) of this Convention, salaries, wages and other similar remuneration derived by a resident of a contracting state in respect of an employment shall be taxable only in that State unless the employment is exercised in the other contracting state. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1) of this Article remuneration derived by a resident of a contracting state in respect of an employment exercised in the other contracting state shall not be taxed in that other State if;

(3) Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic may be taxed in the contracting state of which the person deriving the profits from the operation of the ship or aircraft is resident.

Directors' fees and similar payments derived by a resident of contracting state in his capacity as a member of the board of director of a company which is a resident of the other contracting state may b taxed in that other State.

(1) Notwithstanding the provisions of Articles 15 (Independent personal services) and 16 (Dependent personal services) of this Convention, income derived by entertainers (such as stage, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the contracting state in which these activities are exercised.

(2) Where income arising from personal activities as such exercised in a contracting state by an entertainer or athlete accrues not to that entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Article 7 (Business profits); 15 Independent personal services) and 16 (Dependent personal services) of this Convention, be taxed in that contracting state.

(3) The provisions of paragraphs (1) and (2) of this Article shall not apply if the visit to a contracting state of the entertainer or the athletes is directly or indirectly supported, wholly or substantially from the public funds of the other contracting state, including a political sub-division or local authority of that other state.

Governmental Remuneration and Pensions

(1) Remuneration other than a pension, paid by the Government of a contracting state to any individual who is a national of that State in respect of services rendered in the discharge of governmental functions in the other contracting state shall be exempt from tax in that other contracting state.

(2) Any pension paid by the Government of a contracting state of any individual in respect of services rendered to that government shall be taxable only in that contracting state.

(3) The provisions of this Article shall not apply to remuneration or pensions in respect of services rendered in connection with any trade or business.

Pensions and Annuities

1. Any pension, other than a pension referred to in Article 19(2) of this Convention, or annuity paid to a resident of a contracting state shall be taxable only in that contracting state.
2. The term "pension" means a periodic payment made in consideration of past employment or by way of compensation for injuries received in the course of performance of employment or any payment made under the social security Legislation of either contracting state.
3. The term "annuity" means a stated sum payable periodically stated times during life or during a specified or ascertainable period time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

(1) An individual who is resident of a Contracting state or was resident of that State immediately before visiting the other Contracting state and who is temporarily present in that other State for the prima purpose of:

1. studying at a university or other accredited or recognised educational institution in that other contracting state; or
2. securing training required to qualify him to practice a professional or a professional specialty; or
3. studying or doing research as a recipient of a grant, allowance or award from a governmental, religious, charitable, scientific literary or educational organisation; shall not be subject to tax by that other contracting state in respect of:

(i) gifts from abroad for the purposes of his maintenance, education, study, research or training;

1. the grant, allowance or award; and
2. income from personal services rendered in that other Contracting state (other than any rendered by an articled clerk or other person undergoing professional training to the person or partnership to whom he is articled or who is providing d training) not exceeding the sum of 750 pounds sterling or its equivalent in Indian currency during any fiscal year.

(2) The exemptions under paragraph (1) of this Article shall on extend for such period of time as may be reasonably or customarily required for the purpose of the visit, but in no event shall any individual have the benefit of paragraph (1) of this Article for more than 5 year

(3) An individual who is resident of a contracting state or was resident of the State immediately before visiting the other Contracting state and who is temporarily present in that other State for a period not exceeding 12 months, as an employee of, or under contract with, a resident of the first-mentioned Contracting state, for the primary purpose of:

1. acquiring technical, professional or business experience from a person other than that resident of the first-mentioned contracting state; or
2. studying at a university or other accredited or recognised institution in that other contracting state: Shall not be subject to tax by that other contracting state on his income from personal services performed in the other contracting state for that period in an amount not exceeding 1,500 pounds sterling or its equivalent in Indian currency.

(4) An individual who is a resident of a contracting state or was a resident of that State immediately before visiting the other contracting state and who is temporarily present in that other State for a period not exceeding 12 months as a participant in a programme sponsored by the Government of the other contracting state, for the primary purpose of training, research or study, shall not be subject to tax by that other contracting state in respect of payments made by the Government of the first-mentioned contracting state for the purposes of his maintenance, training, research or study.

(1) An individual who visits a contracting state for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college or other recognised educational institution in that state, and who was immediately before that visit a resident of the other contracting state, shall be exempted from tax by the first-mentioned contracting state on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that state for such purpose.

(2) This Article shall only apply to income from research if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other private person or persons.

0ther Income

1. Subject to the provisions of paragraph (2) of this Article, items of income beneficially owned by a resident of a contracting state, wherever arising, other than income paid out of trusts or the estates of deceased persons in the course of administration, which are not dealt with in the foregoing Articles of this Convention, shall be taxable only in that State.
2. The provisions of paragraph (1) shall not apply to income, other than income from immovable property as defined in paragraph (2) of Article 6, if the recipient of such income, being ii resident of contracting state, carries on business in the other contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situation therein, and the right or property in respect of which the income is pa is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15 of this Convention as the case may be, shall apply.

1. Notwithstanding the provisions of paragraphs (1) and (2) of the Article, items of income of a resident of a contracting state not dealt with in the foregoing Articles of this Convention, and arising in the other contracting state may be taxed in that other State.

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not effect the general principle hereof):

1. Indian tax payable under the laws of Indian and in accordance with the provisions of this Convention, whether directly or by deduction, on profits, income or chargeable gains from source within India (excluding, in the case of a dividend, tax payable respect of the profits out of which the dividend is paid) shall 1 allowed as a credit against any United Kingdom tax computed l reference to the same profits, income or chargeable gains i reference to which the Indian tax is computed.
2. In the case of a dividend paid by a company which is a reside of India to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent the voting power in the company paying the dividend, the credit shall take into account (in addition to any Indian tax for which credit may be allowed under the provisions of sub-paragraph (of this paragraph) the Indian tax payable by the company in respect of the profits out of which such dividend is paid.

(2) Subject to the provisions of the law of India regarding the allowance as a credit against Indian tax of tax paid in territory outside India (which shall not affect the general principal hereof), the amount of the United Kingdom tax paid, under the laws of the United Kingdom and in accordance with the provisions of this Convention, whether direct or by deduction, by a resident of India, in respect of income from sources within the United Kingdom which has been subjected to tax both in India and the United Kingdom shall be allowed as a credit against the Indian Lax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax.

For the purposes of the credit referred to in this paragraph, where the resident of India is a company by which surtax is payable, the credit to be allowed against Indian tax shall be allowed in the first instance against the income tax payable by the company in India and, as to the balance, if any, against the surtax payable by it in India.

(3) Subject to paragraph (5) of this Article, for the purposes of paragraph (1) of this Article the term "Indian tax payable" shall be deemed to include:

1. any amount which would have been payable as Indian tax but for a deduction allowed in computing the taxable income or an exemption or reduction of tax granted for that year in question under the provisions of the Income-tax Act, 1961 (43 of 1961) referred to in paragraph (4) (a) or (b) of this Article;
2. the proportion of any amount which would have been payable as Indian tax by a resident of India but for a deduction allowed in computing the taxable income or an exemption or reduction granted for the year in question under the provisions of the income- tax Act, 1961 (43 of 1961) referred to in paragraph (4)(c) of this Article which corresponds to the proportion of that resident's total production in that year which was actually sold in the Indian Domestic Tariff Area under Orders issued by the Chief Controller of Imports and Exports bearing Nos. 21/90-93, 22/90-93, 23/90- 93, 25/90-93, 26/90-93, 27/90-93 dated 30th March 1990 and similar Orders from time to time published in the Official Gazette by the Central Government under power conferred to it by section 3 of the import and Export (Control) Act, 1947, ~18 of 1947).

4. The provisions referred to in this paragraph are:

1. section 10/(4), 10 (48), 10 16) (vii a), 10(15)(iv), 33 AB, 80 HHD, 80-I and 80-IA;
2. any other provision which may subsequently be enacted granting an exemption or reduction from tax which is agreed by the competent authorities of the contracting states to be of a substantially similar character to provision referred to in sub-paragraph (a) of this paragraph, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general
3. Section IOA and 10B.

4. Relief from United Kingdom tax shall not be given by virtue this paragraph (3) of this Article in respect of income from any source if the income relates to period starting more than 10 fiscal years after deduction in computing taxable income or exemption from, or reduction of Indian tax is first granted to the resident of the United Kingdom the resident of India as the case may be in respect of that source.
5. Income which in accordance with the provisions of this Convention is not to be subjected to tax in a contracting state may be taken account for calculating the rate of tax to be imposed in that contracting state on other income.
6. For the purposes of paragraphs (1) and (2) of this Article pre income and chargeable gains owned by a resident of a contracting state which may be taxed in the other contracting state in accordance, the provisions of this Convention shall be deemed to arise from sources in that other contracting state.