InvestorQ : How can I claim DTAA(Double Taxation Avoidance Agreement)benefits?
shivani Walawalkar made post

How can I claim DTAA(Double Taxation Avoidance Agreement)benefits?

Sakshi Malhotra answered.
3 years ago
The first thing that I would like to tell you about the DTAA claim is that it is a complicated procedure and you should consider taking professional help instead of trying to do it on your own. However, there’s no harm in knowing the procedure:

To claim the benefits under DTAA, the Non-Resident Indians have to provide few do***ents within time and to the concerned deductor. Such as:

  • Self-attested PAN card copy
  • Self-attested Visa and passport copy
  • Tax Residency Certificate
  • Self-declaration *** identity format
  • PIO proof copy (if applicable)
  • Any other do***ent, if required

According to the Finance Act 2013, an individual can only claim DTAA benefit if he/she provides the tax residency certificate, without that certificate is not possible to claim the deduction.

To receive a tax residency certificate one has to make an application in Form10FA to the income tax authorities of the country of residence. When the application is successfully processed, the certificate shall be issued.
Methods to claim DTAA:

There are two ways to claim DTAA benefit:

Exemption Method
Under this method, you don’t have to consider your home country's income at all and tax shall be payable on the income which you have earned in a foreign country. So, it does not matter what are the tax rates in different countries. Therefore, because of DTAA you only pay tax on foreign income.

Tax Credit Method:
Under this method, you will have to take all your income into consideration (home country income + foreign income) and taxes will be calculated as per applicable rates. Then, the taxes as per home country shall be calculated which shall be allowed as credit while paying for taxes.