Circular No. 2/2016

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CIRCULAR NO. 02/2016
F.No,500/82/2015-FTD.I
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes (Foreign Tax & Tax Research Division-I)
. defo
New Delhi, Dated the 25" February, 2016
Subject: Benefits of the India-United Kingdom (UK) Double Taxation
Avoidance Agreement to UK partnership firms.
Se RE ER

An Amending Protocol to the India-UK Double Taxation Avoidance
, Agreement (DTAA) was notified vide Notification No. 10/2014 dated 10%
February, 2014 with effect from 27‘ December, 2013. As a result of the aforesaid Protocol, inter alia, the earlier definition of the term “person” in
Article 3(1)(f) of the DTAA was amended to delete the exclusion of UK
partnership firms, and in addition, it has been provided in Article 4 of the DTAA
that in case of a partnership, estate or trust, the term “resident of a Contracting
State” applies only to the extent that the income derived by such partnership, estate or trust is subject to tax in that State as the income of a resident, either in

its hands or in the hands of its partners or beneficiaries.
2 Apprehensions that the term “person” in the DTAA does not specifically include “partnerships” have been brought to the notice of the Central Board of
Contd...2/-

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Direct Taxes (the Board), and further clarity has been sought on whether the provisions of the treaty are applicable to a partnership. In exercise of the powers conferred under section 119 of the Income-tax Act, 1961, the Board hereby clarifies that the provisions of the India-UK DTAA would be applicable to a partnership that is a resident of either India or UK, to the extent that the income derived by such partnership, estate or trust is subject to tax in that
State as the income of a resident, either in its own hands or in the hands of its partners or beneficiaries.
3: This may be brought to the notice of all concerned.
(Dinesh Antil)
Under Secretary (FT&TR-I)(2)
Copy to:-
1. The Chairman, Members and officers of the CBDT of the rank of
Under Secretary and above.
Di All Pr. Chief Commissioners of Income-tax & All Directors General of
Income-tax with a request to bring to the attention of all officers.
3. The Pr. Director General of Income-tax, NADT, Nagpur
4, The Pr. DGIT(Systems), ARA Centre, Jhandewalan Extension, New
Delhi
= The Pr. DGIT (Vigilance), New Delhi.
6. The ADG (PR, PP & OL), Mayur Bhawan, New Delhi for printing in the quarterly tax bulletin and for circulation as per usual mailing list (100 copies)
a The Comptroller and Auditor General of India (40 copies)
8. The ADG-4 (Systems) for uploading on ITD website
9. Data Base Cell for uploading on irsofficersonline.
10. Guard file (Dinesh Antil)
Under Secretary (FT&TR-1)(2)

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