Dtaa

DOUBLE TAXATION AVOIDENCE AGREEMENT


? Introduction :
In this 21st Century, on that point is vital need to encourage free cross bank flow of goods, services, labour, technology and capital. Due to this there is resultant plus in the income which ultimately leads to the point of taxation.


There argon motley dealings incurred between the both countries of the world and generates income form much(prenominal) operations. As the income has been accrued within the jurisdiction of the witnesser country, it has good to tax the income while on the flip side, as both country has sovereign right to tax its residents on their widely distributed income, the country of resident has right to tax the income hence there is taxation on the same income from the same person i.e. delimitate as Double tax. To avoid this type of equivocalness and not to hinder the economic development of the countries, various countries make believe entered into bilateral agreement nomenclature as Double Taxation Avoidance Agreement or Tax Treaty.


DTA Agreements be entered into after protracted negotiations. Methods are evolved to ensure that double taxation is mitigated. The aim is to avoid double taxation and to create jural certainty for the benefit of contracting states as well as for the tax payer.





? Relief against Double Taxation :
There are following two types of relief against Double Taxation :
a) zygomorphous Relief : [Sec. 90]
When there are agreements between two countries and the victual for the taxation alongwith the right to tax is drafted in the form of DTAA, they are covered under bilateral relief. There are two methods of Bilateral Relief :

1) Exemption Method :
The income which is taxed in the source country is exempted by the country of residence. So such income is taxed but once.


2) Credit Method :
The credit of the income tax which is paid in the country of...If you want to get a full essay, bless it on our website: Orderessay



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