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In a world defined by cross-border trade, remote work, and international investments, the Double Tax Avoidance Agreement (DTAA) between India and the United States plays a pivotal role in easing the tax burden for individuals and businesses navigating both jurisdictions. Originally enforced in December 1990, the treaty aims to mitigate the challenges of double taxation—where the same income could be taxed in both countries—by establishing clear guidelines on taxing rights and income allocation.
The DTAA covers a wide spectrum of income sources, including immovable property, dividends, interest, royalties, capital gains, and professional services. It also outlines precise residency criteria to determine the applicable tax jurisdiction in cases of dual residency. Significantly, the agreement lays out beneficial tax rates for income types such as dividends (15–25%), interest (10–25%), and royalties/technical service fees (10–15%), making it easier for multinational corporations and individuals to operate across both nations.
By preventing fiscal evasion, encouraging transparency, and simplifying dispute resolution, the DTAA enhances bilateral economic cooperation. It ultimately empowers NRIs, Indian businesses with U.S. exposure, and American investors in India with greater tax predictability and reduced compliance friction.
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The contributors to the Article are Sumit Mahajan, AccuWiz Consulting LLP along with inputs from CA Sonakshi Sood.
Disclaimer: The content/information is only for general information of the user and shall not be construed as legal advice. The facts stated are based on information available in public domain. Views expressed above are personal.