Double Taxation Avoidance Agreement Between India and UK: All You Need to Know
The Double Taxation Avoidance Agreement (DTAA) is an agreement between two countries that helps to reduce the tax impact on individuals or companies that have operations in both countries. This agreement ensures that taxpayers are protected from being taxed twice on the same income, and it allows for the exchange of information between tax authorities in both countries. One such agreement is the Double Taxation Avoidance Agreement between India and the UK.
India and the UK have a long-standing history of diplomatic and commercial relations. The DTAA between the two countries came into effect on 1 April 1994. Since then, numerous amendments have been made to the agreement to keep up with the changing times. The latest version of the DTAA was signed in 2018.
The DTAA between India and the UK lays down the rules for taxation of income that is earned in one country by a resident of the other country. The agreement covers various types of income, such as dividends, interest, royalties, and capital gains. It also sets out the procedures for resolving disputes between the tax authorities of the two countries.
The agreement provides relief from double taxation by allowing taxpayers to claim a credit for the taxes paid in the other country. This means that if a taxpayer is liable to pay tax in both countries, they can claim a credit for the tax paid in one country against the tax owed in the other country. This ensures that the taxpayer is not taxed twice on the same income.
The agreement also contains provisions for the exchange of information between the tax authorities of the two countries. This helps in preventing tax evasion and ensuring that taxpayers pay the appropriate amount of tax.
The DTAA between India and the UK is available in the form of a PDF document. It can be downloaded from the website of the Income Tax Department of India. The document contains the full text of the agreement, along with the amendments that have been made over the years.
In conclusion, the Double Taxation Avoidance Agreement between India and the UK provides relief from double taxation for taxpayers who have operations in both countries. It ensures that taxpayers pay the appropriate amount of tax and prevents tax evasion. The agreement can be accessed in the form of a PDF document from the website of the Income Tax Department of India.