The Double Taxation Avoidance Agreement (DTAA) is a bilateral tax treaty signed between two countries to prevent individuals and entities from being taxed twice on the same income.
It is particularly beneficial for Non-Resident Indians (NRIs), foreign nationals, and international businesses earning income across borders.
When you earn income in a foreign country, both that country (the source country) and your country of residence may have the right to tax that income. Without a DTAA, you could end up paying tax twice on the same earnings.
DTAA helps eliminate or reduce this burden by clearly defining how and where different types of income — such as salary, dividends, interest, or capital gains — are taxed between the two countries.
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