What Is the DTAA Between India and the USA?

The DTAA between India and the USA is a comprehensive tax treaty designed to prevent individuals and businesses from being taxed twice on the same income in both countries. It provides clarity on taxing rights, offers tax credits or exemptions, and promotes cross-border trade and investment.

Investment & Financial Planning

Impact of Double Taxation Avoidance Agreement (DTAA) on NRI Property Income

By Manish Prajapat |Last Updated: February 9, 2026

Impact of Double Taxation Avoidance Agreement (DTAA) on NRI Property Income

As an NRIs the double taxation avoidance agreement (DTAA) of India with around 90+ countries can save you thousands. Double taxation occurs when on the same income, you pay taxes twice in two different countries. One where the income is generated, i.e., source country, and the other where you reside currently, i.e., resident country.

Considering this, for NRIs who have capital gains from property and rental income in India, it creates a big financial burden. It is where DTAA comes in role. Confused? To help you out, this blog explains the impact of DTAA on NRI property income and steps to claim tax refunds effectively. So read on and get all the information associated with it.

Manish Prajapat(Tax Expert)

Mr Manish is a financial professional with over 10 years of experience in strategic financial planning, performance analysis, and compliance across different sectors, including Agriculture, Pharma, Manufacturing, & Oil and Gas. Mr Prajapati has a knack for managing financial accounts, driving business growth by optimizing cost efficiency and regulatory compliance. Additionally, he has expertise in developing financial models, preparing detailed cash flow statements, and closing the balance sheets.

Frequently Asked Questions

Under the Double Taxation Avoidance Agreement (DTAA), dividends are generally taxed at a reduced rate in the source country. Depending on the specific tax treaty, the withholding tax rate usually ranges between 5% and 15%. Additionally, the resident country may allow a foreign tax credit for taxes already paid abroad, helping prevent double taxation.

Form 67 is an Indian income tax form used by resident taxpayers to claim Foreign Tax Credit (FTC). It allows taxpayers to claim credit for taxes paid in a foreign country where the income was earned. This form must be filed before filing the income tax return (ITR) in India.

Article 6 of the DTAA states that income arising from immovable property is taxable in the country where the property is located.

An NRI can reduce excess TDS on the sale of property in India by applying for a Lower Deduction Certificate (LDC) from the Income Tax Department. Additionally, capital gains exemptions and reliefs, where applicable, can help lower the tax burden. However, TDS on property sales by NRIs is mandatory and cannot be completely avoided.

NRIs can reduce TDS by following prescribed procedures under the Income Tax Act and applicable tax treaties, such as applying for a lower or nil deduction certificate or claiming DTAA benefits, where eligible.

Impact of Double Taxation Avoidance Agreement (DTAA) on NRI Property Income

Frequently Asked Questions

How Are Dividends Taxed Under DTAA?

What Is Form 67, and Why Is It Required?

What Does Article 6 of the DTAA State?

How Can an NRI Avoid Excess TDS on the Sale of Property?

How Can an NRI Avoid or Reduce TDS?

Impact of Double Taxation Avoidance Agreement (DTAA) on NRI Property Income

Frequently Asked Questions

How Are Dividends Taxed Under DTAA?

What Is Form 67, and Why Is It Required?

What Does Article 6 of the DTAA State?

How Can an NRI Avoid Excess TDS on the Sale of Property?

How Can an NRI Avoid or Reduce TDS?