India has signed agreements with 88 countries on the prevention of double taxation (DBAA). Foreign companies residing in countries with which India has a DtA can claim lower provisions and prices between the Information Technology Act and the DTAA. On 26.11.2018, the Government of the Republic of India and the Government of the People`s Republic of China signed the Double Taxation Prevention Agreement (DBAA). This agreement was signed to reduce double taxation and avoid income tax evasion. The double taxation conventions are an agreement signed between two countries for the elimination of international double taxation, which encourages the exchange of goods, services and capital investment between the two countries. Recently, the EU cabinet approved the signing and ratification of the protocol amending the agreement between India and Sri Lanka to avoid double taxation and prevent tax evasion. The DBAA or double taxation agreement is a tax treaty signed between India and another country (or two or more countries) so that taxpayers can avoid paying twice as much tax on their income from the country of origin and country of residence. Sections 90 and 91 of the Income Tax Act 1961 provide taxpayers with special facilities to avoid double taxation. Section 90 deals with provisions relating to taxpayers who have paid taxes in another country with which India has a DBAA.
Section 91 applies to countries with which India does not have a DBAA. In fact, India offers facilities to both types of taxpayers. Applicants should have a clear vision of the various agreements or contracts signed between India and any other country, as they constitute an important part of upSC Syllabus. Candidates can also download PDF notes at the end of this article. It is a tax treaty, a bilateral economic agreement between two nations that aims to avoid or eliminate the double taxation of the same income in two countries. Under Section 90 of the Income-tax Act 1961, India can enter into an agreement with a foreign country or a specific territory to avoid double taxation of income, to exchange information on the prevention of tax evasion. Topics: Cabinet Authorization – Dtaa – India-Sri Lanka – Mahinda Rajapaksa – PM Modi – Tax evasion – Eushastical decisions to avoid double taxation (DTAA) are a contract between two or more countries and apply in cases where a taxpayer residing in one country must collect his income from another country. India has signed agreements with 88 countries to avoid double taxation, or DBAa, 85 of which have entered into force. This is an important issue in the context of the issue of international relations and the policy of the IAS GS-II. The agreements signed in 1985 between India and Kenya on the prevention of double taxation (DBA) have been renegotiated and revised by both countries. The revised DBAA was signed later on 11 July 2016 between India and Kenya. Here are some of the main strengths of the revised DBAA: double taxation is an issue related to the taxation of cross-border income overruns.
The DtAA can either cover all types of income or target a type of income determined by the type of business/business of citizens of one country in another country. The following categories are covered by the Conventions on the Prevention of Double Taxation (DBAA): this is a general provision aimed at combating the misuse of tax treaties under the Convention on the Prevention of Double Taxation (DBAA).Uncategorized