Double Taxation Avoidance Agreement (DTAA) between India and the USA
The Double Taxation Avoidance Agreement (DTAA) is a tax treaty signed between India and the United States (USA) to help taxpayers avoid paying double taxes on the same income. This agreement fosters economic cooperation and provides relief from the burden of double taxation for residents of both countries.
Key Features of the DTAA between India and the USA
Dividends, Interest, and Royalties
Independent and Dependent Personal Services
Elimination of Double Taxation: Both countries provide relief through tax credits, allowing taxpayers to avoid double taxation.
Exchange of Information: Provisions for information exchange prevent tax evasion and assist in enforcing domestic tax laws.
Impact on Taxpayers
The DTAA reduces withholding tax rates, provides tax credits, and offers clear guidelines on tax treatment, promoting cross-border trade and investment. This agreement benefits businesses and the economy of both nations by ensuring a favorable environment for economic growth and development.
