What is DTAA and How NRIs Can Claim Benefits Under DTAA

Are settled in a foreign country? Often, NRIs staying abroad have to face the trouble of paying taxes in the native country as well as the country where they reside. However, with the help of the Double Tax Avoidance Agreement (DTAA) , you can get relief from paying taxes twice.

India has signed the Double Tax Avoidance Agreement with countries such as the US, UK, Canada, Australia, Germany, South Africa, New Zealand, Singapore, Mauritius, Malaysia, UAE, Qatar, Oman, Thailand, Sri Lanka, Russia, and Kenya. As per DTAA, NRIs cannot avoid paying taxes altogether, but they can be assured of the fact that they will get some relief from paying multiple taxes in different countries.The agreements also withhold that NRIs cannot bring down their tax implications on the income earned in India.Under DTAA, specific tax rates are fixed. The tax gets deducted on the income paid to the residents of that country. This means that when NRIs earn an income in India, the TDS applicable would be according to the rates set in the Double Tax Avoidance Agreement with that country. As per the agreement, NRIs don’t need to pay taxes twice in case the income is earned from

• Services received in India
• Services provided in India
• Fixed Deposits in India
• Savings bank account in India
• House property in India
• Capital gains from transfer of assets in India. he

If you have got the NRI status, you to check whether the residing country has DTAA with India. In order to claim benefits under DTAA in India , you need to file for Form no 10 and submit the following documents:

• Self-declaration cum indemnity format
• Self-attested PAN card copy
• PIO proof copy (if applicable)
• Tax Residency Certificate (TRC)

Form 10: This form is available from the bank, or you can download it online from the incometaxindia.gov.in website. Fill in the required details like nationality, Tax Identification Number, address and period of residential status.

Self-Declaration

This is the information that an individual has to provide information about the country which will be covered under the DTAA with India.

Tax Residency Certificate (TRC)

This certificate can be takenfrom Income Tax or Government Authorities for a particular financial year where you are currently residing. You will be required to submit the necessary documents. Once the details are verified and furnished, the Income Tax Department will issue a TRC to the Indian resident in Form 10FB.The TRC is valid for a period of one year. To claim the DTAA benefits without any hassles, it is mandatory to submit TRC every year.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.