Double Taxation Avoidance Agreements – Complete Details


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Double Tax Avoidance Agreements

one can utilize the arrangements of the Double Taxation Avoidance Arrangement (DTAA), a tax treaty India has actually signed with many nations to avoid double tax of income earned in abroad.

Double Tax Avoidance Agreements (DTAA):

The Double Tax Avoidance Agreements (DTAA) is bilateral arrangements entered into in between 2 countries state, in between India and another foreign state with an objective to avoid, tax of earnings in both the areas. Another objective behind these agreements is to promote and cultivate financial relations alongside of trade and investment affairs between the two countries.India has actually signed DTAA with many nations. comprehensively Double Taxation Avoidance
Contracts (DTAA) with 85 nations.

Advantages of DTAA:

1. In some cases depending upon the kinds of earnings total exemption of earnings from tax can be obtained.

2. While paying to any non residents TDS can be subtracted at the specified rate according to DTAA which in most cases is lower than normal rate.

3. The Arrangements of DTAA override the general arrangements of earnings tax act.

The significant countries with which it has signed the DTAA are the United States, the UK, the UAE, Canada, Australia, Saudi Arabia, Singapore and New Zealand.

As per provisions laid in area 90 of earnings tax act assessee has an alternative of choosing to be governed either by the arrangements of particular DTAA or the arrangements of the Income Tax Act, whichever are more useful.

How to get benefits under DTAA:

If a person needs to declare tax exemption ortax credit on the basis of tax paid in a non-resident country, he/she will have tofurnish the appropriate files to the tax authorities.

1) Tax Residency Certificate

2) Self-attested copy of PAN Card.

3) Self-declaration cum indemnity bond

4.Self-attested copy of Passport and Visa

5. Any evidence to show that taxpayer is a person of Indian origin

According to the modification generated the Indian Earnings Tax Act as announced in Union Spending plan 2012, NRIs who want to get
DTAA advantage have to mandatorily offer ‘Tax Residency Certificate (TRC)’ to the deductor. This is
applicable for all NR clients who wish to avail DTAA benefit.

Advised Articles

Following kinds of incomes are some examples for the incomes which can be covered under DTAA:

1. Income Income

2. Company income

3. Earnings from profession.

4. Dividend income

5. Interest

6. Royalty

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