DTAA (Double Taxation Avoidance Agreement) Consultancy

What is double taxation Avoidance Agreement (DTAA)?

A person who is a resident of one country and earns any income in some other country may end up paying income tax in both countries. This may happen because few countries charge tax on the basis of residential status and few charges on the basis of source of income. To address this issue or a similar kind of issue, many countries have entered a written agreement to allocate taxing rights between nations. The focus is on elimination or relief from double taxation. This written agreement is called as Double Avoidance Agreement.

How Does Double Taxation Avoidance Agreement Work?

When an NRI has any income or residential status in India on which he is liable to pay tax in his resident country as well as in India, then he can consult DTAA consultancy for some relief. Double Taxation Avoidance Agreement covers various provisions that tackle an issue like allocating taxing rights or minimum withholding tax on particular income in source country or tax credit to the extent taxes have already been paid abroad etc.

When and How to get relief under double taxation avoidance agreement (DTAA)?

It is not mandatory to consult DTAA in all international cases. An NRI can go with only domestic provisions of countries involved without considering DTAA. But in case he feels considering provisions of DTAA is beneficial for him, he can go with it. In that case, he shall get Tax residency certificate from his resident country and shall fill a self-declaration form F while filing the tax return in India. This TRC and Form F is not required to be submitted anywhere but shall be kept as a record for future references or may have to submit to Indian Income tax authorities in case of any inquiry.

In case you have questions related to residential status in India or seek DTAA consultancy, NRI CA Services can assist you.

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