i have a doubt

Originally posted by : Bhoomi Sanghvi
	dear all, will u pls tell me what is DTAA(Double Tax Avoidance Agreement)? thanks in advance..

Hi

Tax have to be paid in india for the income earned by assessee based on his residential status and deemed/accrual concepts(Sec.9). Therefore a person may suffer by paying tax in one or more countries for the same income when income is earned outside india/in india  as per respective tax legislation of foreign countries. In order to give relief for such burden harming assessees indian govt have entered DTAA with many foreign countries so that relief may be claimed by assessees while computing income.  By this their tax burden will get reduced to some extent.

When anyone is taxed in different countries as per the rules of the company than resident company gives such tax relief to avoid double taxation... SO govn of all different countries enter into DTAA for that....

Suppose Mr. Sharma earns a certain amount in country X. Now country X will charge tax on dat for sure. Now Mr. Sharma from country X, goes back to his home Country , Country Y. Now in Case country Y also decides to charge tax on his income, he will avoid paying double tax...to avoid such a scenario...countries get intoi agreement wherein if tax has been charged by one country, the other counbtry abstains from doing so.. Thus, an agreement to avoid such double taxation is called Double Tax AVoidance Agreement.

Dear Bhoomi

DTAA is an instrument to avoid the double burden of Taxation on same assesse.

DTAA provides some condition like that (it always between two countries like India & Aus, Ind & USA, India & UK, UK & USA, etc)

Any one Country will take Tax and provide Tax Certificate

Both Coutnries will take Tax ( with in limit of Max Tax)

No Country will take tax (like Aggrement made between Indian & moretious)

Regards

Thank u so much for giving me such a nice response.

Thanks once again.