Article 19 - Government Service

Article 19 governs the taxation of salaries, wages, and other remuneration (including pensions) paid by a State, political subdivision, or local authority in respect of services rendered to that State.

Salaries (Article 19(1)): Pay for services rendered to the State of India (e.g. Indian government employees on deputation to Taiwan (Chinese Taipei)) is taxable only in India - except where the services are rendered in Taiwan (Chinese Taipei) and the employee is a national of Taiwan (Chinese Taipei), or became resident of Taiwan (Chinese Taipei) not solely for the purpose of rendering the services. In that case, Taiwan (Chinese Taipei) taxes.

Pensions (Article 19(2)): Government pensions are taxable only in the paying State (India, in the typical case), unless the recipient is a national and resident of the other State.

Commercial activities exception (Article 19(3)): Where services are rendered in connection with a business carried on by the State (a State-owned commercial enterprise - Air India was a frequent example), Articles 15, 16, and 18 apply instead. The State doesn't get the exclusive-taxation advantage for what is essentially commercial employment.

Diplomatic and consular staff: Covered by Article 28 (Members of Diplomatic Missions) in most India treaties - additional protections under the Vienna Convention overlay the DTAA position.

ICAS / autonomous bodies: Whether an Indian autonomous body (e.g. ICAR, ICMR, CSIR laboratories) qualifies as a "political subdivision" depends on the body's legal status and degree of State control. CBDT has issued clarifications for specific bodies; check the latest position for each.