DTAA (Double Taxation Avoidance Agreement) Consultancy

If you are an NRI or have income from more than one country, the same income may be taxable in India and another country. A Double Taxation Avoidance Agreement (DTAA) provides rules for allocating taxing rights and may provide relief from double taxation.

What is DTAA?

DTAA is an agreement between India and another country covering the taxation of different types of income, such as:

Salary and employment income
Interest and dividend income
Rental income
Capital gains
Pension income
Business or professional income

The applicable treatment depends on the country, type of income, residential status and specific DTAA provisions.

How Does DTAA Help Avoid Double Taxation?

DTAA may provide relief through methods such as:

Tax exemption, where applicable
Foreign Tax Credit, subject to applicable conditions

The treaty and domestic tax provisions should be considered together before determining the applicable tax treatment.

DTAA Consultancy for NRIs

DTAA is particularly relevant for NRIs having income, investments or other financial interests in India while being tax residents of another country.

The applicable treaty provisions may also affect TDS on payments made to NRIs.

Tax Residency Certificate (TRC)

An NRI claiming DTAA benefits generally needs a Tax Residency Certificate (TRC) from the relevant foreign tax authority. Additional prescribed information may need to be furnished through Form 10F, where applicable.

Foreign Tax Credit

Where foreign tax has been paid on income also taxable in India, Foreign Tax Credit (FTC) may be available subject to applicable provisions.

Eligible resident taxpayers claiming FTC are required to furnish Form 67 within the prescribed timeline.

When is DTAA Review Important?

DTAA provisions can differ by country and by type of income. Therefore, the residential status, source and nature of income, applicable treaty and required documents should be reviewed before claiming treaty benefits.

DTAA Consultancy Assistance

If you are an NRI, have income from India and another country, or need assistance with DTAA benefits, TRC, Form 10F, Foreign Tax Credit or taxation of cross-border income, NRI CA Services can assist with the applicable requirements.