Double Tax Avoidance Agreement : How NRI Can Get Tax Benefits Under DTAA

Are you NRI who has dual income and earning in a foreign country as well as India? this post may interest you as this tells about how you can get DTAA taxation benefits. DTAA is Double Tax Avoidance Agreement. DTAA is an agreement between two countries to avoid double taxation. It is globally known as a tax treaty.

What is Double Taxation

Many times it happens that one can have income earned in one country would attract tax in another country also. This is called double taxation. E.g If you are moving abroad by keeping your income source in India.  Such income would definitely attract taxes in India as well as the country of your residence. This is called double taxation. To avoid double taxation and to make the country attractive destination a concept of double tax avoidance agreement is developed.

How DTAA Helps You?

Don't expect from DTAA to eliminate the amount of tax payable as a whole buy It would definitely enable NRI to reduce the tax burden. 
  • In simple terms whenever NRIs earn an income in India, instead of normal TDS, tax rate decided under tax treaty DTAA is applicable.
  • It helps NRI to reduce the tax burden. The tax rate applicable to this type of income would be taxed at the prescribed rate under the act. 
  • India has established DTTA with more than 80 foreign countries across the world. You can check the details of agreement on Income Tax website 
  • Below are tax percent for each country for reference. DTAA tax rate are different for different countries. It is recommended to contact experts in this subject to claim benefits under double tax avoidance agreement.
Sl No. Country TDS Rate
1 Armenia 10%
2 Australia 15%
3 Austria 10%
4 Bangladesh 10%
5 Belarus 10%
6 Belgium 15%
7 Botswana 10%
8 Brazil 15%
9 Bulgaria 15%
10 Canada 15%
11 China 15%
12 Cyprus 10%
13 Czech Republic 10%
14 Denmark 15%
15 Egypt 10%
16 Estonia 10%
17 Ethiopia 10%
18 Finland 10%
19 France 10%
20 Georgia 10%
21 Germany 10%
22 Greece As per agreement
23 Hashemite kingdom of Jordan 10%
24 Hungary 10%
25 Iceland 10%
26 Indonesia 10%
27 Ireland 10%
28 Israel 10%
29 Italy 15%
30 Japan 10%
31 Kazakhstan 10%
32 Kenya 15%
33 South Korea 15%
34 Kuwait 10%
35 Kyrgyz Republic 10%
36 Libya As per agreement
37 Lithuania 10%
38 Luxembourg 10%
39 Malaysia 10%
40 Malta 10%
41 Mauritius 7.50-10%
42 Mongolia 15%
43 Montenegro 10%
44 Morocco 10%
45 Mozambique 10%
46 Myanmar 10%
47 Namibia 10%
48 Nepal 15%
49 Netherlands 10%
50 New Zealand 10%
51 Norway 15%
52 Oman 10%
53 Philippines 15%
54 Poland 15%
55 Portuguese Republic 10%
56 Qatar 10%
57 Romania 15%
58 Russia 10%
59 Saudi Arabia 10%
60 Serbia 10%
61 Singapore 15%
62 Slovenia 10%
63 South Africa 10%
64 Spain 15%
65 Sri Lanka 10%
66 Sudan 10%
67 Sweden 10%
68 Swiss Confederation 10%
69 Syrian Arab Republic 7.50%
70 Tajikistan 10%
71 Tanzania 12.50%
72 Thailand 25%
73 Trinidad and Tobago 10%
74 Turkey 15%
75 Turkmenistan 10%
76 UAE 12.50%
77 UAR (Egypt) 10%
78 Uganda 10%
79 UK 15%
80 Ukraine 10%
81 United Mexican States 10%
82 USA 15%
83 Uzbekistan 15%
84 Vietnam 10%
85 Zambia 10%

Benefits of DTAA

There are multiple benefits of DTAA. Below are some of the definite benefits
  1. The lower Tax burden for NRI
  2. Minimize the opportunity of tax evasion
  3. Double taxes will be avoided on the same income
  4. Tax exemption

Income Types under DTAA

The income types covered under double tax avoidance agreement are given below, and NRI can avoid paying double taxation on below income
  1. Any income arising from capital gain on transfer of assets in India.
  2. Income from House property located in India.
  3. Salary Income received in India.
  4. Interest income earned in India from saving the account, fixed deposit etc.
  5. Royalty income earned in India.
  6. Income from the service provider in India.

How NRI Can Get Benefits of DTAA Of Taxation?

In order to claim DTAA 
  • NRI requires to provision Tax Residency Certificate (TRC)
  • NRI will have to produce a Tax Residency Certificate from the country of residence. 
  • A foreign national claiming a relief under DTAA is required to make an application in the home country to its tax authorities or to other designated authorities to obtain TRC.

Which Methods NRI Can Use to Avail DTAA benefits?

Following methods can be used by NRI to claim DTAA benefits.

Tax Credit

Tax Credit method is used to claim benefit in the country of residence. In this method, a taxpayer needs to add all income from foreign sources into total taxable from the resident country and calculate applicable income tax. Based on the law applicable in that country a person can claim the tax credit.

Tax Exemption

This method is claiming relief in any one country. In this method, a taxpayer is allowed to claim his income from foreign sources under tax exemption. It is a method to eliminate the complete scenario of double taxation.


The third method is the deduction method in which the taxpayer pays the tax in the country where income is earned and get subtracted from the global income in the country of residence. The tax is calculated on the difference and paid in the country. This method does not eliminate double taxation completely, that’s why it is the less popular method.

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