In a recent judgement of Sivakarthick Raman, the Chennai Tribunal [Sivakarthick Raman v. ACIT, IT [2025] 176 taxmann.com 491] has reaffirmed its earlier ruling in the Assessee’ s case and other rulings wherein the Tribunal held that the salary income for services rendered in China has been rightly offered tax by the Assessee in China, where such assessee was working and directed the AO to allow the benefit of exemption under Article 15(1) of the India -China DTAA.  Please note that for administrative convenience, this salary was paid by BMW India into the Assessee’s Indian bank account. 

The Tribunal has reaffirmed the following points : 

 - The provisions of section 5(2) are subjected to other provisions of the Income-tax Act (‘the Act’). The regular salary accrued to any assessee is chargeable to tax in terms of section 15(a) of the Act. Even as per the provisions of section 9(1)(ii) of the Act, salary income would be deemed to accrue or arise in India only if it is earned in India in respect of services rendered in India.

 - Reading down Article 1 and Article 15 of India-China DTAA, held that treaty benefit shall be applicable to persons who are residents of both India as well as China. Therefore, the contention of the revenue that the Assessee being a non-resident and hence treaty benefit cannot be extended to assessee, is incorrect.

- Accordingly, the salary so earned for work performed in China would be taxable in China. 

In the attached newsflash, we have summarised the facts of the case, contention of revenue and assessee along with the Tribunal observations

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