A Double Tax Avoidance Agreement (DTAA) is a bilateral treaty that stops the same income being taxed in both India and the foreign country. India has active DTAAs with 90+ countries. Relief works two ways: (1) a lower TDS rate on Indian income like interest, dividends and royalties — claimed by giving your payer a Tax Residency Certificate (TRC) and Form 10F; and (2) a foreign tax credit for tax already paid abroad — claimed in your ITR through Form 67. Under Section 90(2) you may always apply whichever rate — treaty or domestic — is more beneficial.
DTAA does not exempt you from filing. If TDS was deducted at the higher domestic rate, or you want a foreign tax credit, you still file an Indian ITR (usually ITR-2). The treaty only decides which country taxes what and caps the rate — it is not an automatic refund.
Key DTAA Rates — India's Major Treaties
Indicative treaty rates for common India-source income. Where the domestic Indian TDS rate is higher (e.g. up to 20%+ on interest or dividends), an NRI can apply the lower DTAA rate with a TRC and Form 10F. Rates exclude surcharge and cess and can change — verify the current treaty text on the portal.
| Country | Dividend | Interest | Royalty / FTS | Notable |
|---|---|---|---|---|
| USA | 15% / 25%* | 15% | 10% / 15% | *25% if ≥10% voting stock; Foreign Tax Credit in US return |
| UK | 15% | 15% | 15% | PE income taxed in country of establishment |
| UAE | 10% | 12.5% | 10% | UAE has no personal income tax; residency rules key |
| Singapore | 15% | 15% | 10% | Capital gains on shares per domestic law; BEPS/MLI applies |
| Canada | 15% / 25%* | 15% | 10% / 15% | *25% if controls ≥10% voting power; pensions taxed in residence country |
Indicative treaty rates only — always verify the latest DTAA text and protocol on incometax.gov.in. Rates exclude surcharge and cess.
How to Claim DTAA Relief
There are two paths: get TDS deducted at the lower treaty rate upfront, or pay the higher rate and reclaim the excess (and any foreign tax credit) when you file.
Domestic Rate vs Treaty Rate — Which Applies?
Under Section 90(2) an NRI can choose whichever is more beneficial — the domestic Indian rate or the DTAA rate. The treaty rate only applies if you furnish a valid TRC; without it, the payer must deduct at the domestic rate.
Domestic rate — no TRC
- NRO interest TDS at 30% (+ surcharge/cess)
- Applied when TRC / Form 10F not given
- Excess recoverable only via ITR refund
- Higher upfront cash outflow
DTAA rate — with TRC
- India-USA interest capped at 15%
- Needs TRC + Form 10F given to payer
- Lower TDS deducted at source
- Beneficial-rate option under Sec 90(2)
A payer cannot apply the treaty rate on trust. If you do not give a valid Tax Residency Certificate (and Form 10F) before the payment date, the bank or company must deduct at the full domestic rate — you then wait for a refund after filing. Arrange the TRC early each financial year.
NRI with Indian interest, dividends or a property sale? Get your DTAA position checked.
Talk to an NRI Tax Expert →TRC & Form 10F — The Lower-TDS Documents
To claim a treaty rate on Indian income you need two things. Section 90(4) makes the TRC mandatory; Form 10F supplies any details the TRC is missing.
| Document | Purpose | How / where |
|---|---|---|
| Tax Residency Certificate (TRC) | Proves you are a tax resident of the foreign country — mandatory under Sec 90(4) | Obtain from the foreign tax authority (e.g. IRS for USA, HMRC for UK), for the relevant financial year |
| Form 10F | Self-declaration supplementing the TRC where it lacks prescribed details | Filed online on incometax.gov.in (e-Filing → Income Tax Forms); give the acknowledgement to your payer |
| PAN & declaration | Enables lower TDS and correct 26AS/AIS credit | Share PAN with the payer; a no-PE declaration may be sought for business income |
Under the Income-tax Act, 2025 (from AY 2026-27) the online declaration is being reorganised — Form 10F is reported to move to Form 41. Confirm the live form on incometax.gov.in before filing.
- Valid TRC for the relevant financial year
- Form 10F filed online (registered on the portal)
- PAN quoted to the Indian payer
- TRC + Form 10F given before the payment date
- Beneficial-rate comparison done under Sec 90(2)
- No-PE / beneficial-owner declaration where asked
Foreign Tax Credit — Form 67 & Section 91
When income is taxed both abroad and in India, a resident claims a Foreign Tax Credit (FTC) for the overseas tax. For treaty countries the relief is under Section 90/90A; for non-treaty countries, unilateral relief comes under Section 91. The FTC is claimed by filing Form 67 (Rule 128) before or with your return.
- Form 67 — details foreign income, foreign tax paid and the relief claimed; file it on the portal on or before filing the ITR
- Section 90 / 90A — treaty-based relief by exemption or tax-credit method
- Section 91 — unilateral relief for non-treaty countries; credit limited to the lower of the Indian or foreign rate on that income
The foreign tax credit can be denied if Form 67 is not filed by the due date for furnishing the return. Keep the foreign tax-payment challan and the exchange rate used, and file Form 67 before you submit the ITR — do not leave it for later.
Have foreign salary, dividends or capital gains to report in India?
Get FTC & ITR Help →DTAA Relief — Frequently Asked Questions
Related TaxClue services
DTAA Relief — TRC, Form 10F & Form 67 Sorted
Whether you are an NRI cutting TDS on Indian income or a resident claiming credit for tax paid abroad, TaxClue's CA-led team handles the TRC, Form 10F, Form 67 and your ITR — 100% online, across India.