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Double Tax Avoidance Agreement (DTAA): Step-by-Step Filing Process

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Financial Analyst

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Step 1: Identify the Applicable DTAA Treaty

  • Check whether India has a DTAA with the relevant country
  • Review the specific article applicable to the income type:
    • Salary
    • Interest
    • Dividend
    • Royalty
    • Capital gains
    • Business income

Each article specifies taxing rights and rates.

Step 2: Determine Tax Residency Status

Confirm your tax residency for the relevant financial year:

  • Resident in India – Worldwide income taxable in India
  • Non-Resident / RNOR – Limited income taxable in India

Residency is determined under the Income Tax Act, 1961.

Step 3: Obtain Tax Residency Certificate (TRC)

A Tax Residency Certificate (TRC) is mandatory for claiming DTAA benefits.

For Indian Residents

  • Apply through the Income Tax portal
  • TRC is issued by the Indian tax authorities

For Non-Residents

  • Obtain TRC from the tax authority of your home country

Step 4: Fill and Submit Form 10F

Form 10F is required if TRC does not contain all prescribed details.

Details include:

  • Nationality
  • Tax Identification Number
  • Residential status
  • Period of residency
  • Address

Form 10F must be filed online on the Income Tax portal.

Step 5: Collect Supporting Documents

Keep the following documents ready:

  • Tax Residency Certificate (TRC)
  • Form 10F acknowledgment
  • Copy of passport (for individuals)
  • Income details & nature of income
  • Tax payment proof in foreign country
  • DTAA article reference
  • Bank & income statements

Step 6: Apply DTAA Benefit While Filing Income Tax Return

While filing the Income Tax Return (ITR):

  • Disclose foreign income in relevant schedules
  • Claim relief under Section 90 or 90A
  • Mention DTAA country, article, and tax paid
  • Upload foreign tax payment proof (if applicable)

Ensure accurate disclosure to avoid scrutiny.

Step 7: Claim Foreign Tax Credit (FTC)

If tax is paid in a foreign country:

  • File Form 67 before filing ITR
  • Upload proof of foreign tax paid
  • Claim credit against Indian tax liability

Failure to file Form 67 may result in denial of FTC.

Step 8: Respond to Notices (If Any)

The Income Tax Department may:

  • Seek clarification
  • Ask for documents
  • Request DTAA justification

Timely response is essential to avoid rejection.

Common DTAA Mistakes to Avoid

  • Not obtaining TRC
  • Missing Form 10F filing
  • Incorrect article selection
  • Non-disclosure of foreign income
  • Delayed filing of Form 67

Conclusion

DTAA benefits help taxpayers legally avoid double taxation on cross-border income. Proper identification of treaty provisions, timely documentation, and accurate filing ensure smooth acceptance of DTAA claims.

SavingMantra assists individuals and businesses with DTAA analysis, Form 10F filing, TRC support, foreign tax credit claims, and end-to-end compliance.

Disclaimer

This content is for general informational purposes only and does not constitute tax or legal advice. DTAA provisions, tax laws, and filing procedures are subject to change. Readers are advised to consult a qualified tax professional before claiming DTAA benefits. SavingMantra is not responsible for any actions taken based on this information.

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