DTAA Between India explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The India-Australia DTAA divides taxing rights over cross-border income and caps source-country tax on dividends, interest and royalties. Its royalty definition is broad, a recent protocol eased tax on Indian firms' offshore technical services, and relief is claimed with a TRC, Form 10F and Form 67.
Overview
The India-Australia DTAA supports strong trade, education and services links between the two economies. It allocates taxing rights and requires the residence state to relieve double taxation by the credit method. In India the treaty is applied together with the Income-tax Act, 2025, and the taxpayer uses whichever of the treaty or the Act is more beneficial.
Who It Covers (Residence and Scope)
The agreement covers residents of India and Australia under Article 4, resolving dual residence by the standard tie-breaker for individuals and a management test for companies. It covers Indian income tax and Australian income tax. A recent amending protocol addressed the taxation of technical and consultancy services rendered by Indian companies to Australian clients from India, a long-standing concern for the Indian IT sector — verify the current effective wording.
Key Articles — Treaty Rate vs Act Rate
| Income type | Treaty Article | Treaty rate (source) | Indian Act rate (indicative) |
|---|---|---|---|
| Dividends | Article 10 | 15% (verify current treaty rate) | 20% for non-residents plus surcharge/cess |
| Interest | Article 11 | 15% (verify) | 20% under the Act |
| Royalties | Article 12 | 10% / 15% by category (broad definition) | 20% under the Act |
| Fees for technical services | Article 12 | Capped; protocol eased offshore services | 20% as FTS |
| Capital gains | Article 13 | Generally per source-state law | Per Act |
| Business profits | Article 7 | Source tax only if PE exists | Per Act |
The royalty and technical-services articles are the ones to watch, because the royalty definition is wide and the protocol changed how certain services are treated. Verify the current treaty rate and effective dates for your transaction.
How to Claim Relief (TRC, Form 10F, Form 67)
An Australian resident earning Indian income furnishes an Australian TRC and files Form 10F electronically to obtain reduced treaty withholding. An Indian resident with Australian-taxed income claims foreign tax credit by filing Form 67 before completing the Indian return, supported by evidence of the Australian tax. India relieves double taxation for residents by the credit method.
Worked Example
An Australian company pays an Indian firm ₹10,00,000 for software royalties. If the applicable treaty rate is 10%, Australia withholds ₹1,00,000 rather than a higher domestic figure once the Indian firm supplies a TRC and Form 10F. In India, the same income is taxable and the firm claims credit for the ₹1,00,000 Australian tax through Form 67, limited to the Indian tax on that income.
Common Points to Watch
Check the broad royalty definition before treating a payment as taxable royalty. For technical services, confirm the current protocol position, which may exempt offshore Indian services. Keep the TRC valid and file Form 67 within the prescribed time.