Tax On Income From Immovable Property And Business - DTTA | Spectrum Accounts

Tax On Income From Immovable Property And Business Profits Under DTAA Between United Arab Emirates And India


What is the purpose of having an Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with UAE by India (DTAA) between UAE and India?

  • In the Present Era of cross border transactions across the globe, the effect of Taxation is one of the important considerations for any Trade and Investment decisions in another countries.
  • Where a taxpayer is resident in one country and but has source of income situated in another country, it gives rise to possible double taxation.
  • DTAA lays down rules for taxation of the income by the Source country and the residence country.
  • The Provisions of DTAA are compared with domestic law, assessee can opt for anyone which is beneficial to him.

Taxes Covered

This agreement applies on the following existing taxes:

  1. Income Tax, Corporation Tax and Wealth Tax Agency in UAE
  2. Income Tax and Wealth Tax in India

Elimination of Double Taxation

  1. Where a resident of India derives income or owns capital which, in accordance with the provisions of the agreement, may be Tax Agency Dubai, India shall allow as a deduction from the tax on the income/capital of that resident an amount equal to Income tax or capital tax paid in UAE whether directly or by deduction.
  2. Where a resident of UAE which in accordance with the agreement may be taxed in India, UAE shall allow as a deduction from the tax on income of that person an amount equal to income tax paid in India.
  3. However such deduction shall not exceed that part of Income tax in UAE or capital tax as computed before the deduction is given.

Exchange of Information between the tax authorities of UAE and India

Tax Agency in UAE, The competent authorities of contracting state shall exchange such information as is necessary for carrying out the provisions of the agreement or for the prevention or detection of evasion of taxes.

Limitation of Benefits

An entity which is a resident of a contracting state shall not be entitled to the benefits of this agreement if the main purpose of creation of such entity was to obtain the benefits of this agreement.

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