Dividend from shares held in Indian Companies and specified Mutual Funds are exempt from tax. However in case of a resident, dividend income from investments outside India is taxable, subject to treaty benefits. Expenses incurred specifically for earning such taxable investment income are deductible.
In case of a resident, interest income from foreign investment is taxable in India, subject to treaty benefits.
Any overseas rental income is subject to tax in India. The expenses incurred in paying any municipal taxes and mortgage interest and a standard deduction in respect of other expenses in allowable while computing the taxable income.
