Introduction

If you’re an NRI earning income in more than one country, you might face the risk of double taxation—being taxed on the same income by both India and your country of residence. But there’s good news: the Double Taxation Avoidance Agreement (DTAA) exists to protect you.

Let’s break down what DTAA is, how it works, and why every globally earning Indian must understand it.

What is DTAA?

The Double Taxation Avoidance Agreement (DTAA) is a tax treaty India has signed with over 85 countries—including the USA, UAE, UK, Australia, and others. It ensures that you are not taxed twice on the same income in both India and the foreign country.

It applies to:

• Salary or freelancing income
• Business profits
• Rental income
• Dividends, interest, and royalties
• Capital gains

Why Does Double Taxation Happen?

Double taxation occurs because:

• India taxes global income of residents.
• The foreign country may tax income earned within its borders.
• So, NRIs or expats with income in two countries might face overlapping tax obligations.

DTAA Offers Two Main Relief Methods

• Exemption Method Income is taxed in only one of the two countries.
• Tax Credit Method Income is taxed in both countries, but one country (usually India) gives credit for the tax paid abroad.

India generally uses the tax credit method for countries like the US, Australia, UK.

Example Case:

Priya, an Indian living in the US, earns $80,000 in salary and ₹4 lakh rental income in India.

• Her US income is taxable in the US.
• Her Indian income is taxable in India.

But say India tries to tax a portion of her US income under global income rules. She can use the DTAA India-USA to claim credit for US taxes already paid, reducing or nullifying her Indian tax burden on that portion.

Benefits of Using DTAA

1. Avoid Paying Taxes Twice Legally shield yourself from duplicate tax payments.
2. Claim Refunds or Lower TDS in India Apply for lower TDS on interest/dividends by submitting Form 10F, TRC, and PAN.
3. Legally Reduce Tax Burden
   Use DTAA rates—e.g., 10% on dividends vs 20% under default provisions.
4. Plan Global Investments Better Knowing where income will be taxed helps you plan better, especially in real estate or equity.

What Documents You Need for DTAA Claims

• Tax Residency Certificate (TRC) from your country of residence
• Form 10F declaration
• Copy of your passport, visa, PAN
• Any foreign tax return or payment proof (for claiming credit in India)

Country-Specific Notes

How Greenback Consultants Helps

• Evaluate your income for DTAA eligibility
• Assist in TRC, Form 10F & documentation
• Prepare returns with foreign tax credit computation
• Advise on tax-saving structures using DTAA rules

DTAA is not just a tax technicality—it’s a powerful financial shield. When used correctly, it can save lakhs, ensure compliance, and unlock peace of mind for NRIs and global earners.

Have income in two or more countries?
Let our DTAA specialists help you avoid double taxation the smart and legal way.