How NRI can avoid tax under India DTAA

After the introduction of ‘Project Insight’, India government is progressing in right direction to make taxpaying process more transparent from people point of view.

A new agreement had signed by India with several countries to avoid tax on same income in both countries. DTAA agreement is Double Taxation Avoidance Agreement. It is signed between two countries.

The provisions of the Income Tax Act apply only to the extent they are more beneficial to the individual. Provisions of the DTAA prevail over the statutory provisions. Non resident Indians residing in different countries (DTAA approved) can avail the tax benefits of this agreement by submission of following documents on time.

  
1. Tax residency certificate

This certificate is available to the people by the government of the country in which he /she resides. Some columns are mandatory in Tax Residency Certificate (TRC).TRC should be filled accurately before submission to the Indian Tax Deductor. Name, status (individual , company, firm etc), address, nationality, country, tax identification number of the person in that country, tax status, period for which the tax certificate is issued should all be mentioned in the TRC. This form should be duly verified by the government of the country in which NRI reside.

2. Self declaration-cumindemnity form

The format of the form should be according to the prescription of particular bank.The following information should be mentioned in the form:

•  Account number
• Country of residence
•  Period for which TRC is submitted
• Tax rate applicable under DTAA

3. Other documents

• Self attested copy of PAN card
• Self attested copy of passport
• Self attested copy of visa.

Important information

-The documents listed above must be furnished on an annual basis for claiming DTAA tax benefits each year.

-If the TRC is not submitted within the timelines required by the deductor, the deductor (eg. Bank) will deduct tax on NRO deposits at the presently applicable rate of 30.9%.

Ruchi Anand and Associates is a blend of top chartered accountants in India having vast experience in different fields. They can advise you on your financial situation. In order to get maximum deductions and refund, our team of experts understand your financial situation and help you get maximum savings in filing tax returns. Filing ITR is a complex task but RAAAS can get you maximum savings while you can focus on your business.

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Author Bio:

Kanika Arora writes on behalf of Ruchi Anand and Associates, Auditor in India and one of the top chartered accountant in Delhi provides services from company registration to filing ITR.