List of countries with whom India has Double Taxation Avoidance Agreement (DTAA)
It is important to know the list of countries with whom India has DTAA agreements to help you save on tax.
India has Double Taxation Avoidance Agreement (DTAA) with 88 countries, but presently 85 has been in force. The DTAA treaty has been signed in order to avoid double taxation on the same declared asset in two different countries.
How DTAA works?
The DTAA applies for those individuals wherein an individual will reside as a taxpayer in one country and earns income in another country. These DTAA's can either cover all sources of income or can be limited to certain specific areas of income which includes income earned from air transportation, shipping, inheritance and so on.
These DTAAs are made to make a country attractive for investment purpose by providing relief on dual taxation. The relief is provided by exempting income earned overseas from tax in the resident country or by providing credit to the extent wherein taxes have already been paid abroad. In some of the cases, DTAAs are known to provide concession on tax rates.
For example, if a person is working in the US for more than 181 days then he becomes an NRI. He will be unable to handle any domestic saving deposit account in India.
So, he has to convert his savings account to an NRO savings account where he can put his money. It will also allow him to make transactions of funds originating in India such as rents, dividends, pensions etc.
However, tax deducted at source on interest income earned in NRO account is 30.9 per cent, so much of your returns will be gone paying taxes.
In order to avoid paying 30.9 per cent as taxes you need to fill the DTAA. You will be able to avail TDS of 10 per cent if you live in any of the following country and you fill the DTAA form. Read: What is DTAA here?
List of countries with whom India has singed DTAA are :
1. Armenia
2. Australia
3. Austria
4. Bangladesh
5. Belarus
6. Belgium
7. Botswana
8. Brazil
9. Bulgaria
10. Canada
11. China
12. Cyprus
13. Czech Republic
14. Denmark
15. Egypt
16. Estonia
17. Ethiopia
18. Finland
19. France
20. Georgia
21. Germany
22. Greece
23. Hashemite kingdom of Jordan
24. Hungary
25. Iceland
26. Indonesia
27. Ireland
28. Israel
29. Italy
30. Japan
31. Kazakastan
32. Kenya
33. Korea
34. Kuwait
35. Kyrgyz Republic
36. Libya
37. Lithuania
38. Luxembourg
39. Malaysia
40. Malta
41. Mauritius
42. Mongolia
43. Montenegro
44. Morocco
45. Mozambique
46. Myanmar
47. Namibia
48. Nepal
49. Netherlands
50. New Zealand
51. Norway
52. Oman
53. Philippines
54. Poland
55. Portuguese Republic
56. Qatar
57. Romania
58. Russia
59. Saudi Arabia
60. Serbia
61. Singapore
62. Slovenia
63. South Africa
64. Spain
65. Sri Lanka
66. Sudan
67. Sweden
68. Swiss Confederation
69. Syrian Arab Republic
70. Tajikistan
71. Tanzania
72. Thailand
73. Trinidad and Tobago
74. Turkey
75. Turkemistan
76. UAE
77. UAR (Egypt)
78. UGANDA
79. UK
80. Ukraine
81. United Mexican States
82. USA
83. Uzbekistan
84. Vietnam
85. Zambia
Procedure to claim tax benefit under DTAA
If you have an NRO account then you must fill in the DTAA form to avoid TDS of 30.9 per cent. You can check from the list given here whether the country in which you are residing in as NRI has signed a DTAA with India.
If TDS has been deducted, you can claim the money by filing your tax return. Otherwise, you will lose the amount of money where tax has been deducted.
Why you should know the list of DTAA countries?
You should know the list of DTAA countries, simply because, you can avoid paying taxes twice. What the agreements basically says that is your paying tax already once and hence, you should not be taxed again.
Especially, if you are an NRI and employed in a country like the United States, you can save on taxes.
You would need to submit an application at the nearest bank.
You would need to submit an application at the nearest bank.
Remember, the list of DTAA countries will keep changing, based on the agreements that are altered frequently. We suggest you check with your bank for all the other details.
Please note that the list of countries with whom we have a DTAA keeps changing depending on the government's policies that keep changing from time to time. Hence, you need to examine the new list every time, to see if any changes have been made or affected. We suggest that you take a look at the list on a regular basis. In fact, India is now examining its DTAA agreements with many countries and these could soon undergo a change.
What to do to implement the DTAA?
Now, let us assume that have a TDS, that is being deducted at 30.6 per cent on your NRO deposits. You need to apply to your bank and submit a range of documents like a valid visa, bank statement in the country of your residence, etc. Thereafter, if there is a DTAA agreement with the country of your residence, tax would be implemented only at the rate of 10 per cent.