27 June, 2025 at 6:25 pm
NRIs can avoid double taxation through the lifesaving DTAA. It is basically an agreement that is signed by two countries. It is carried out by India with different countries, in which they fix a specific rate at which TDS will be deducted on the income paid to residents of that country.
India has signed DTAA with major countries such as Australia, Belgium, Canada, Italy, the US, etc. To apply for DTA, first, you need to find out the type of income on which the DTAA applies. Also, the tax liability under the Income Tax Act. If your income falls under the specific articles of DTAA, then it will be taxed. Use section 90(2) and decide which act is more beneficial between the DTAA (Treaty Override) and the IT Act.
Double Taxation is when an NRI's income is taxed both in India and their country of residence, which is quite unfair. To avoid this situation, the Indian Government has agreed to the DTAA agreement with several countries across the world. With the help of this agreement, an NRI working outside India will not have to pay tax on the income that they earn outside India.
Take advantage of the DTAA to avoid double taxation. NRIs need to fill out the DTAA application form (Form 10F) to enjoy the benefits offered by the DTAA between India and their country of residence.
Do check if India has a DTAA agreement with your resident country. If yes, then you can use the DTAA to avoid paying tax twice. This agreement covers a range of income, such as interest, employment, capital gains, business profits, etc.
To avoid double taxation as an NRI, you should take advantage of the Double Taxation Avoidance Agreement (DTAA).
The best way to avoid double taxation is through the DTAA. When DTAA is in effect, you will be required to pay taxes in only one country and not both. Your income would be taxable in both countries, like India, and in your residence country, but taxes paid in one country can be claimed as a credit in another country.
You can avoid double taxation by using the DTAA between India and your country of residence. Just get a TRC (Tax Residency Certificate), and claim either a refund or an exemption when filing taxes.
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