TaxFinancial Glossary
DTAA (Double Taxation Avoidance Agreement)
Definition
A bilateral treaty between two countries to prevent the same income from being taxed in both jurisdictions. India has DTAAs with over 90 countries including the US, UK, UAE, Singapore, and Australia. The treaty specifies which country has the primary right to tax specific types of income.
Why It Matters
For NRIs, DTAA determines whether rental income from Indian property, capital gains on Indian stocks, or interest on Indian FDs gets taxed once or twice. Proper DTAA structuring can save NRIs lakhs in duplicate taxation. However, you must actively claim treaty benefits — they are not applied automatically.