International Tax
DTAA (Double Taxation Avoidance Agreement) — Meaning
Bilateral treaty between India and another country preventing the same income from being taxed twice.
What is DTAA (Double Taxation Avoidance Agreement)?
Double Taxation Avoidance Agreement (DTAA) is a bilateral tax treaty between India and another country to prevent income from being taxed in both countries. India has signed DTAAs with 90+ countries. Key mechanisms: exemption (income taxed only in one country) or credit method (tax paid in one country credited against liability in the other). To claim DTAA benefit: the taxpayer must obtain a Tax Residency Certificate (TRC) from their country of residence and file Form 10F with the Indian tax authority or deductor. DTAA often provides lower TDS rates than domestic law.
More International Tax terms
NRI (Non-Resident Indian)
An Indian citizen residing outside India for more than 182 days in a financial year.
RNOR (Resident But Not Ordinarily Resident)
A transitional residency status for individuals who have recently returned to India after being NRIs.
FEMA (Foreign Exchange Management Act)
Indian law governing foreign exchange transactions, cross-border investments and NRI account operations.
LRS (Liberalised Remittance Scheme)
RBI scheme allowing resident individuals to remit up to USD 250,000 per year abroad for permitted purposes.
NRE Account (Non-Resident External)
Bank account in India for NRIs holding foreign earnings converted to INR — interest is tax-free.
