Streamline your tax compliance with our expert-assisted GSTR 9 & 9C services @ ₹14,999/-

Tax efficiency, interest avoidance, and financial control with advance payment @ 4999/-

Know How You Can Claim Relief Under Double Taxation?

The article is all about ways and means to claim relief under double taxation in India. The article shows how it’s possible to eliminate the problem of double taxation in India.

How Does Double Taxation Work?

When it comes to paying taxes, no one wants to get hit with double taxation. This is when you are taxed twice on the same income. It can happen at the state and federal levels, as well as internationally. Thankfully, there are ways to claim relief if you find yourself in this situation.

In India, double taxation relief is available for certain taxes, including income tax and capital gains tax. To claim relief, you will need to file a return with the Indian Income Tax Department. You will also need to provide proof of payment of taxes in the other country.

If you are able to successfully claim relief, you will only have to pay taxes on the income that was earned in India. This can be a huge relief, especially if you have been taxed heavily in another country.

If you think you may be eligible for double taxation relief in India, be sure to talk to a tax professional such as Vakilsearch to get all the details. They can help you determine if you qualify and how to go about claiming the relief.

Learn more about ITR filing in india

What Are the Rates of Double Taxation?

There are many countries that have double taxation agreements (DTAs) with India. These agreements are in place to prevent double taxation of income earned in one country and repatriated to the other. Under Indian law, there are two main types of DTAs: 

Use Vakilsearch`s Income tax calculator to decide your taxable earnings and document your Individual Tax Return (ITR) with ease.

– those that cover taxes on income and on capital gains, and 

– those that cover only taxes on income. 

The rates of taxation under a DTA vary depending on the agreement, but generally speaking, they range from 5% to 20% for income taxes, and 0% to 10% for capital gains taxes. In order to claim relief under a DTA, you must first file a tax return in India. Once your return has been processed, you will need to submit a claim form to the relevant authority in your country of residence. 

If you are claiming relief for the first time, you may be required to provide supporting documentation, such as your tax assessment notice from India. Once your claim has been approved, you will be issued a certificate of entitlement, which you can use to offset against your tax liability in your country of residence. 

Discover the seamless power of online bookkeeping – empowering your business with real-time insights and financial clarity, all at your fingertips.

Does the Source of Income Matter in India?

Yes, the source of income does matter when it comes to taxation in India. If the income is generated from within India, then it is subject to Indian taxes. However, if the income is generated from outside India, then it may be subject to taxes in the country where it is generated as well as in India. 

What Are the Deductions Available on Double Taxation?

There are a few deductions available on double taxation in India. These include:

  1. Deductions on income from house property: You can claim a deduction of up to Rs 1,50,000 on the interest paid on a loan taken for the construction or purchase of a self-occupied house property.
  2. Deductions on income from business or profession: You can claim a deduction of up to Rs 1,50,000 on the interest paid on a business loan. You can also claim a deduction of up to Rs 3,00,000 on the depreciation of plant and machinery used in your business.
  3. Deductions on income from other sources: You can claim a deduction of up to Rs 10,000 on the interest paid on a savings account. You can also claim a deduction of up to Rs 1,50,000 on the interest paid on an education loan.

How to Claim Relief Under Double Taxation in India?

In order to claim relief under the DTAA, you must first file your income tax return in India. Once you have done so, you can then approach the tax authorities in the other country and request for a certificate of residency. This certificate will confirm that you are a resident of India and are therefore eligible for relief.

Once you have obtained the certificate of residency, you can then submit it to the tax authorities in the other country along with your income tax return. They will then process your return and give you credit for the taxes paid in India.

Advantages of Double Taxation

There are a number of advantages to double taxation, which is why it is such a popular system. First and foremost, it ensures that businesses pay their fair share of taxes. This means that companies can’t avoid taxes by hiding their profits in low-tax jurisdictions. It also levels the playing field between small businesses and large multinationals, as both are subject to the same tax rules.

Another advantage of double taxation is that it allows countries to pool resources and share the burden of tax collection. This makes the system more efficient and reduces the overall cost of tax collection. It also helps to prevent tax evasion and avoidance, as companies are less likely to try to hide their profits if they know they will be taxed twice.

 Finally, double taxation can help to promote economic growth. By encouraging businesses to reinvest their profits in new projects, it provides a boost to the economy. This can create jobs and spur innovation, leading to long-term benefits for everyone involved.

What Are the Frequently Asked Questions Related to Double Taxation in India?

  1. What is double taxation?

Double taxation is when an individual or business is taxed twice on the same income or profits. This can happen when income or profits are taxed at both the federal and state level, or when foreign income is taxed both in the country where it was earned and in India.

  1. Who is liable for double taxation?

Double taxation can apply to individuals, businesses, or companies that earn income or profits in more than one country. In the case of individuals, double taxation can occur when someone works in one country but lives in another, or when someone has income from investments in another country. Businesses can be subject to double taxation if they have operations in more than one country, or if they earn income from sales in another country. Companies can also be subject to double taxation if they have shareholders who live in another country.


If you are a resident of India and have paid taxes in another country, you may be eligible for relief from double taxation. To claim this relief, you must file a return in India and submit certain documents, such as your tax return from the other country. The process can be complicated, but it is worth it to get the relief you deserve. If you have any questions about claiming relief from double taxation, please consult Vakilsearch without any delay.

Read more: 

Subscribe to our newsletter blogs

Back to top button


Remove Adblocker Extension