Double Taxation Avoidance Agreement - India

Double Taxation Avoidance Agreement (DTAA) also referred as Tax Treaty is a bilateral economic agreement between two nations that aims to avoid or eliminate double taxation of the same income in two countries.

  • Dividends, interest, royalty income and fees for technical or professional services will be taxed both in the country of residence and in the country of source. 
  • Business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state. 
  • Profits derived by an enterprise from the operation of aircraft in international traffic shall be taxable in the country of place of effective management of the enterprise. 
  • Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries.

DTAA - India
India has DTAA with more than 80 nations, including Armenia, Bangladesh, Finland, Ireland,Japan, Kazakhstan, Greece, Italy, Bhutan and several others. Further, India is constantly gearing to establish DTAA with other nations as such agreements work towards promoting trade and investments among contracted nations.