DTAA Relief: How NRIs Avoid Double Taxation

The problem DTAA actually solves

If you're an NRI earning income that's taxable both in India and in your country of residence — rental income, interest, capital gains — you could, in theory, be taxed twice on the same rupee. India's Double Taxation Avoidance Agreements, signed with over 90 countries, exist specifically to prevent that.

How relief is actually claimed

Relief isn't automatic just because a treaty exists — it has to be claimed. Under Section 90 (where a DTAA applies) or Section 91 (where it doesn't), you can generally claim a Foreign Tax Credit for tax already paid in the other country. To use it, you'll typically need Form 67, filed electronically before your Indian return is due, along with proof of the foreign tax actually paid — a tax payment certificate or equivalent from the other jurisdiction.

The document that decides your rate

To claim the lower treaty rate rather than India's standard rate on income like interest or dividends, you generally need a Tax Residency Certificate (TRC) from your country of residence, plus a self-declaration in Form 10F where the TRC doesn't already contain everything India requires. Without it, the payer may withhold tax at the higher domestic rate by default.

Where this trips people up

Form 67 has to be filed before your return, not alongside it or after — file it late and the credit can be denied even if everything else is in order. The treaty terms also vary meaningfully by country: the specific article covering your type of income, the eligible rate, and the documentation required all depend on which country you're resident in. Reading the treaty text for your specific situation, rather than assuming general rules apply, is worth the time before you file.