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DTAA and Compliances & Returns

Double Taxation Avoidance Agreement (DTAA) is a treaty signed between two or more countries to help taxpayers avoid paying double taxes on the same income. When an individual or business earns income in a foreign country, DTAA ensures they do not get taxed in both countries. India has signed DTAA with over 90 countries, including the USA, UK, Canada, Australia, UAE, and Singapore.

DTAA expert in India offering double taxation avoidance agreement services for NRIs, Indian residents with foreign income, and global businesses to avoid double taxation and claim tax relief under DTAA provisions.

Why is DTAA Important?

  1. Prevents Double Taxation: Avoids tax liabilities in two countries.

  2. Tax Relief: Reduces the overall tax burden.

  3. Boosts Cross-Border Trade: Encourages investment and trade.

  4. Avoids Tax Evasion: Ensures transparency and legal compliance.

  5. Provides Clarity: Defines tax rates and liabilities for foreign entities.

Types of Relief Under DTAA

Types of relief under DTAA for NRIs and Indian residents—exemption and tax credit methods explained by expert CA for double taxation relief and foreign income tax planning in India.

1

Exemption Method

Income is taxed in only one country.

2

Tax Credit Method

Tax paid in a foreign country is deducted from the tax payable in the home country.

DTAA Tax Rates in India (Country-wise)

Here are some tax rates under DTAA for commonly transacted countries:

Country
Interest
Royalty
Fees for Technical Services (FTS)
Dividend
USA
15%
10%
10%
15%
UK
15%
10%
10%
10%
UAE
12.5%
10%
10%
10%
Canada
15%
10%
10%
15%
Australia
15%
10%
10%
15%

DTAA Compliance & Return Filing Process

Step 1: Determine DTAA Eligibility

  • Check if India has a DTAA with the country where income is earned.

  • Determine the applicable tax rate.
     

Step 2: Obtain a Tax Residency Certificate (TRC)

  • Apply to the tax authorities in the resident country.

  • Ensure TRC has all required details such as name, status, country, tax ID, and period of tax residency.
     

Step 3: Submit Form 10F

  • A mandatory form for claiming DTAA benefits.

  • Filed online via the Income Tax e-filing portal.
     

Step 4: File Income Tax Return (ITR) in India

  • Report foreign income and claim DTAA benefits.

  • Use Form 67 for claiming foreign tax credit (FTC).

  • Ensure all documents are attached.
     

Step 5: Maintain Necessary Documentation

  • TRC, Form 10F, proof of tax paid abroad, income statement.

Need help with DTAA compliance? Talk to our Experts

Timeline for DTAA Compliance & Return Filing

Task
Timeline
Obtain TRC
2-4 weeks
File Form 10F
Instant (Online)
File Form 67
Before ITR due date
File ITR with DTAA benefits
31st July (Individuals) / 30th September (Companies)
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Documents Required for DTAA Benefits

  • Tax Residency Certificate (TRC) from the foreign country.

  • Form 10F (filed online on the Income Tax portal).

  • PAN Card (for Indian taxpayers).

  • Foreign Tax Payment Proof (if tax has been paid abroad).

  • Income Statement (salary, capital gains, dividends, etc.).

  • Bank Statements (for verifying foreign income).

Common Mistakes to Avoid

  • Not obtaining a Tax Residency Certificate (TRC).

  • Filing Form 10F incorrectly.

  • Missing Form 67 for Foreign Tax Credit.

  • Incorrect reporting of foreign income.

  • Delaying ITR filing, leading to penalties.

Common mistakes to avoid in DTAA filing process—expert CA guidance for NRIs and Indian residents to prevent double taxation, incorrect tax credit claims, and DTAA non-compliance issues.

Frequently asked questions

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