It is a known fact that Shah Rukh Khan has a special connection with Dubai. He has large properties there and is also part of their tourism promotions. But currently, all his palatial properties are under scrutiny for taxation.
In spite of the India-UAE tax treaty, the actor has been asked to include notional rent filing for IT return in India. Interesting fact is Though Shah Rukh Khan tried to contend the same; his contention was rejected by ITAT. The bench of Amit Shukla and G S Pannu has decided credits of taxes paid in the UAE will be allowed as per law.
In 2008 Shah Rukh Khan was gifted this villa, and IT made the calculation for the year 2008-09, the deemed rental value of this Dubai property summed up to Rs. 96 lakhs and with a 30% standard deduction, the taxable sum was Rs. 67.2 lakhs. Shah Rukh Khan tried to resist the decision of ITAT by referring to an amendment made in 2008. As per the India tax treaty with another country, the income of a taxed person in the other country shall first be included within the ‘taxable’ bracket of income in India, and King Khan tried to take advantage of it.
For a certain period of time Shuddhasattwa Ghosh, People Advisory Services at EY India tried to strengthen the rule, and now Income Tax authorities have been planning on making residential properties overseas taxable more strictly. It seems Shuddhasattwa Ghosh is going to be very strict about the new rule, as he warns warn every high taxpayer who owns property abroad to be careful asking them to include the rent or deemed rent of their overseas residential assets while filing the return in India.