The Double Taxation Avoidance Agreement (DTAA) between India and USA is designed to prevent NRIs from being taxed on the same income in both countries. Here's how it works:
Relief from Double Taxation: If you earn US foreign income in India and are a resident of the US for tax purposes, DTAA ensures you don't pay taxes twice on the same income. You pay tax in the country of residence, and the other country provides tax relief.
Tax Credit Method: The DTAA India USA allows for the tax paid in India to be claimed as a credit against the US tax liability, reducing the overall tax burden. This is similar to how the Foreign Tax Credit for NRIs in USA works.
Types of Income Covered: The DTAA covers various income types, such as salary, interest, dividends, royalties, and capital gains, defining where and how these should be taxed to avoid double taxation.
Benefits for NRIs: This agreement simplifies tax filing for NRIs in USA and ensures that NRIs or PIOs/OCIs are not subjected to double taxation on their global income.
Our Blogs
Foreign Earned Income Exclusion (FEIE) for U.S.-Based NRIs – Step-by-Step Guide
Read MoreDTAA Analysis between India & USA
Read MoreA simple step wise guide for filing US tax returns for NRIs
Read MoreDTAA India-USA: How NRIs Can Avoid Double Taxation
Read MoreIndia FBAR, 8938, 8621 & other income and Assets Foreign Reporting and IRS Compliance
Read More1040 (NR) or 1040 (Resident) - Which return should a US Green card Holder residing abroad file?
Read MoreHow can US NRI Comply with PFIC and FBAR Rules on Indian Investments?
Read MoreHow can NRI file Taxes for Income earned in US & India in both countries with help of India for NRI?
Read MoreWhat is DTAA between India and the US?
Read MoreWho is a non-resident for US tax purposes?
Read MoreDo I need to pay tax on Indian income in the USA?
Read MoreWhat is FBAR Filing for US NRI? What needs to be kept in mind?
Read MoreWhat is DTAA between India and the US?
DTAA Between India and the US
The Double Taxation Avoidance Agreement (DTAA) between India and USA is designed to prevent NRIs from being taxed on the same income in both countries. Here's how it works:
Relief from Double Taxation: If you earn US foreign income in India and are a resident of the US for tax purposes, DTAA ensures you don't pay taxes twice on the same income. You pay tax in the country of residence, and the other country provides tax relief.
Tax Credit Method: The DTAA India USA allows for the tax paid in India to be claimed as a credit against the US tax liability, reducing the overall tax burden. This is similar to how the Foreign Tax Credit for NRIs in USA works.
Types of Income Covered: The DTAA covers various income types, such as salary, interest, dividends, royalties, and capital gains, defining where and how these should be taxed to avoid double taxation.
Benefits for NRIs: This agreement simplifies tax filing for NRIs in USA and ensures that NRIs or PIOs/OCIs are not subjected to double taxation on their global income.
Also Read: Who is a non-resident for US tax purposes?