logo

Dtaa Agreement With India

Sections 90 and 91 of the Income Tax Act 1961 relieve taxable persons of the payment of double taxation. Section 90 applies to cases where India has entered into a bilateral agreement with another nation. These are „foreign or certain area agreements“, while Section 90A covers „the adoption by the central government of a convention between certain associations to facilitate double taxation“. Section 91 applies to cases where India does not have a bilateral agreement, but a unilateral agreement. It indicates how to benefit from tax breaks in „countries with which there is no agreement“. The double taxation convention is a convention signed by two countries. The agreement is signed to make a country an attractive tourist destination and allow NGOs to get rid of the multiple payment of taxes. The DTAA does not mean that NRA can avoid taxes altogether, but it does mean that NRA can avoid higher taxes in both countries. DTAA allows an NRA to reduce its tax impact on income generated in India.

DTAA also reduces cases of tax evasion. Remember that the list of DBAA countries will be constantly evolving due to agreements that are often changed. We advise you to check with your bank about all other details. You should know the list of DTAA countries simply because you can avoid paying two taxes. What the agreements basically say is that you are already paying taxes and therefore you should not be taxed again. Under the Finance Act 2013, a person is not entitled to relief under the double taxation convention unless he presents a certificate of tax residence with reference to the deduction. To obtain a certificate of tax residence, an application must be submitted to the income tax authorities in Form 10FA (application for a certificate of residence for the purposes of an agreement under sections 90 and 90A of the Income Tax Act 1961). Once the application has been successfully processed, the certificate is issued in Form 10FB. Suppose you have a TDS that will be deducted from your NGO deposits at 30.6%.

You need to apply to your bank and file a number of documents such as a valid visa, account statement in your country of residence, etc. Subsequently, if there is a DBA agreement with the country of your residence, the tax would only be introduced at a rate of 10 percent. Please note that the list of countries with which we have a DBAA is constantly evolving according to government guidelines, which change from time to time.

  • Share