Key takeaway
A Double Taxation Avoidance Agreement (DTAA) decides which country may tax a type of income and often caps India’s tax on items like interest and dividends. You can apply the treaty or Indian domestic law, whichever is more beneficial. To claim treaty benefits in India you generally need a Tax Residency Certificate from your country and the prescribed Form 10F. Income from Indian property is usually taxable in India under treaties, with relief given in your country of residence.
What a DTAA does
- Allocates taxing rights between India and the other country by type of income.
- Limits rates India can charge on some income paid to residents of the other country — commonly interest, dividends, royalties and fees for technical services.
- Resolves dual residence through tie-breaker tests: permanent home, centre of vital interests, habitual abode, nationality.
- Provides relief by exemption or credit for tax paid in the other country.
Typical treatment for NRIs
| Income | Usual position under treaties |
|---|---|
| Rent from Indian property | Taxable in India; credit at home |
| Capital gains on Indian property | Taxable in India; credit at home |
| Interest on NRO deposits | India’s tax often capped at the treaty rate |
| Dividends from Indian companies | India’s tax often capped at the treaty rate |
| Salary for work abroad | Generally taxable only in the country of residence |
Each treaty differs; check the one with your country.
Claiming treaty benefits in India
- Obtain a Tax Residency Certificate (TRC) from your country’s tax authority for the relevant year.
- File Form 10F electronically on the Indian e-filing portal where the TRC lacks prescribed details.
- Give these, with your PAN, to the payer (bank, tenant, buyer) so TDS is deducted at the treaty rate where permitted, or claim the benefit in your Indian return.
Claiming credit at home
Report Indian income in your home return and claim credit for Indian tax under the treaty or domestic law. Keep Indian TDS certificates and your Indian return as evidence.
Related guides
- All NRI legal guides
- NRI tax and FEMA in India: the complete guide
- Residential status for tax
- NRI tax, banking and FEMA services
References
- Income-tax Act, 2025 provisions on double taxation relief (corresponding to sections 90 and 91 of the 1961 Act)
- India’s comprehensive DTAAs — Income Tax Department
- Form 10F and Tax Residency Certificate requirements
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
