Foreign tax relief
Residents are allowed a credit against their Indian tax liability for income tax paid abroad on income arising abroad, which is doubly taxed, according to the terms of the provisions of the relevant tax treaty.
India has signed double tax avoidance agreements (DTAAs) with a majority of the countries and limited agreements with eight countries. The treaties provide for the income that would be taxable in either of the contracting states, depending on the understanding of the nations, and the conditions for taxing and the exemption from tax.
Below is a listing of the countries with which India has concluded DTAAs.
|China, People's Republic of||Luxembourg||Sweden|
|Egypt||Mongolia||Trinidad and Tobago|
|France||Namibia||United Arab Emirates|
Tax Residency Certificate (TRC)
For the purpose of claiming a tax treaty benefit, it is necessary for an NR to obtain a TRC of it being resident of the other country or specified territory. In this connection, as an additional requirement, the government of India has notified a specific form, wherein the person has to self-declare prescribed details.
List of limited agreements between India and other countries
India has entered into eight limited agreements for double taxation relief with respect to income of airlines/merchant shipping companies with the following countries:
|Afghanistan||Lebanon||Peoples Democratic Republic of Yemen|
|Ethiopia||Maldives||Yemen Arab Republic|
Tax information exchange agreements (TIEAs) between India and other countries
The list of 21 countries with which India has entered into TIEAs for effective exchange of information relating to tax matters is given below.
|Argentina||Cayman Islands||Macau, China|
|Bermuda||Isle of Man||Monaco|
|Belize||Jersey||Saint Kitts and Nevis|
|British Virgin Islands||Liberia||San Marino|
Social security agreements (SSAs)
To eliminate social security implication in two countries on account of cross border relocation of employees, India has entered into SSAs with the following 20 countries:
Except for Brazil and Quebec, all SSAs are operational.