FAQ's

Income Tax

FEMA/RBI Regulations

Double Tax Avoidance Agreement (DTAA)

In India, as well outside India, generally, the taxation arises on two basis. One is on resident basis and second on source based. Hence, in case of a person, who is tax resident of other country and earning income from India, or vice versa case, taxability arises in two countries. This situation leads to double taxation of same income in two countries. This situation is very commonly faced by NRIs/PIOs, as they are tax resident of other country and earning income from various sources/investment in India.

To avoid such situation, Countries do a bilateral agreement, named as Double Tax Avoidance Agreements (DTAA). The basic objective of this agreement is to avoid taxation of same income in both the countries. In India, salient features of DTAA are as under.