What is the Full Form of DTAA?

The full form of DTAA is Double Taxation Avoidance Agreement. It refers to a treaty signed between two or more countries in cases where a taxpayer residing in one country has to earn their income from another country. Moreover, India has also signed a DTAA with over 88 countries out of which 85 have become a successful leap of faith. Let’s learn more about this treaty.

Also Read: What is the full form of ITR?

What is a Double Taxation Avoidance Agreement?

As mentioned above, the DTAA is a treaty signed between multiple countries. It facilitates the exchange of goods, services, and investments by simply removing international double taxation. This means that there are agreed-upon tax rates and regulations over certain types of income earned in any specific country by a tax resident of another country.

Moreover, double taxation is one of the most common issues in the taxation system. DTAAs can either cover all types of income or target a specific one depending on certain factors. Generally, here are a few categories covered under DTAAs:

• Capital gains
• Services
• Savings/fixed deposit accounts
• Property 

Also Read: What is the Full Form of Tax?

Benefits of DTAA

The benefits of Double Taxation Avoidance Agreement include:

• It aims to promote countries as a lucrative investment destination.
• DTAAs provide legal certainty as they contain specific guidelines for taxing international income. 
• The DTAA can provide concessional rates of tax in some cases.
• Countries under the DTAA are given relief from double taxation by simply exempting incomes earned abroad from taxes. 
• DTAAs generally include anti-abusive clauses that ensure that only legitimate citizens of the two countries benefit from them. 
• This agreement also offers a tax credit in the country where the revenue was actually generated or the source country. This in turn prevents individuals from paying the same tax twice. 

Documents Required to Claim DTAA Advantages

NRIs who wish to benefit from the Double Taxation Avoidance Agreement must provide the Tax Residency Certificate. Additionally, other required documents include:

• Self-declaration form
• PAN card
• Passport
• Visa 
• PIO Proof Copy

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We hope this blog has helped you understand the DTAA full form and everything related to it. If you want to know more, find the general full form list on our blog. In the world of short forms, you can rely on the Leverage edu page to know about more full forms like this! Connect with us study abroad experts to achieve your international dream today!