India’s Double Taxation Avoidance Agreements

Posted by

Mar. 26 – Double taxation avoidance agreements (DTAs or DTAAs) aim to prevent the same income from being taxed by two or more states, while also eliminating tax evasion and encouraging cross-border trade efficiency. DTAs prevent double taxation by allowing the tax paid in one of the two countries to be offset against tax payable in the other country, and/or by providing exemptions or reduced tax rates for specific income types such as interest, royalties, dividends. In India, withholding tax on dividends is 0 percent per the Tax Act, but DTAs serve to reduce interest and royalty rates.

The table below reflects India’s double taxation avoidance agreements (DTAAs) in effect. In certain cases (such as in the case with states from the former Soviet Union), rates represent treaties between groups of countries. In cases in which a treaty does not specify a maximum withholding tax rate, or the maximum rate specified in a treaty is higher than the domestic withholding tax rate, the domestic rate applies.

This article was extracted from the new issue of the India Briefing Magazine, titled “India’s Taxes for Foreign-invested Entities.” In this issue, we provide an overview of India’s taxes on business, which includes a section on India’s double taxation avoidance agreements, and then discuss individual income tax rates and deductions.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email india@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across India by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

An Introduction to Doing Business in India
In this guide, we introduce the basics of setting up and running a company in the country and some of the key issues investors should pay attention to. This issue is currently available as a complimentary download on the Asia Briefing Bookstore.

Leave a Reply

Your email address will not be published. Required fields are marked *

Never miss an update

Stay ahead of the curve in emerging Asia by subscribing to our regional publications. Subscribers take full advantage of all our website features and receive regular updates from our local experts on doing business in Asia.

Subscribe
India Briefing