Now let`s say they have a TDS that is deducted from 30.6% on your NGO filings. You must apply to your bank and file a number of documents such as a valid visa, an account statement in the country of your residence, etc. Then, if there is a DBAA agreement with the country of your residence, the tax would only be made up to 10 per cent. You should know the list of DTAA countries, simply because you can avoid paying taxes twice. What is basically stated in the agreements is that your tax payment is already once and therefore you should not be taxed again. India Briefing is produced by Dezan Shira – Associates. The company supports foreign investors throughout Asia from branches around the world, including Delhi and Mumbai. Readers can write firstname.lastname@example.org for more business help in India. The agreement on double tax evasion is a treaty signed by two countries.
The agreement is signed to make a country an attractive tourist destination and allow NGOs to decide whether to pay several taxes. DTAA does not mean that NRA can totally avoid taxes, but it does mean that NRA can avoid paying higher taxes in both countries. The DTAA allows an NRI to reduce its tax impact on revenues collected in India. The DTAA also reduces cases of tax evasion. Although DBAas are mapped to ease tax issues and promote investment, there may be some side effects that may arise from such agreements. «double taxation» under tax treaties generally means double legal taxation (circumstances in which a taxpayer is taxed on the same income in more than one country). There is another type of double taxation – economic double taxation. This relates to the imposition of two or more taxes on a tax basis. Section 90 and Section 91 of the Income Tax Act of 1961 provide taxpayers with an exemption from double taxation payments. Section 90 applies to cases where India has a bilateral agreement with another nation. These are «foreign agreements or certain areas,» while Section 90A includes «The adoption by the central government of agreements between certain associations to facilitate double taxation.» Section 91 applies to cases where India does not have a bilateral agreement, but a unilateral agreement. It outlines how to benefit from tax relief when «countries with which there is no agreement» can be used.
Please note that the list of countries with which we have a DBAA is constantly evolving, depending on the government`s policy that changes from time to time. Therefore, you should check the new list each time to determine if any changes have been made or influenced. We advise you to check the list regularly. Indeed, India is currently reviewing its DBAA agreements with many countries, which could soon be amended. DBAAs can be either complete, all sources of revenue are encapsulated or limited to certain areas, which means that revenues from shipping, inheritance, air transport, etc., are taxed. India currently has DTAA with more than 80 countries, with plans to sign such contracts with more countries in the coming years. Among the countries with which it has comprehensive agreements are Australia, Canada, the United Arab Emirates, Germany, Mauritius, Singapore, the United Kingdom and the United States of America.