India-United States DTAA
Treaty signed: September 12, 1989 | Effective from: December 18, 1990
● Live · Rates served from /api/tax-rules/dtaa/US
Dividends
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Interest
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Royalties
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Capital Gains
Fees for Technical Services
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Key Treaty Provisions
- Article 25 (Limitation on Benefits) - treaty benefits restricted to bona fide residents; conduit structures do not qualify
- India-US DTAA covers all types of income: business profits, dividends, interest, royalties, capital gains, salaries, pensions
- Saving Clause: US retains the right to tax its citizens/residents as if no DTAA existed (so US citizens in India get limited relief)
- MLI (Multilateral Instrument) ratified by India but US has not ratified - old bilateral treaty terms still apply
- FBAR and FATCA reporting obligations apply to US persons holding Indian accounts/assets - DTAA does not override US domestic reporting
Frequently Asked Questions
Does the India-US DTAA help me avoid double tax on salary in India?▾
If you are a US citizen working in India, the Saving Clause in the India-US treaty means the US taxes you regardless. However, you can claim a foreign tax credit (Form 1116) in the US for Indian taxes paid, largely eliminating double taxation. The DTAA helps Indian residents receiving US-source income get lower withholding rates (15% on dividends, 15% on interest).
What TDS rate applies on royalties paid by an Indian company to a US company?▾
Under the India-US DTAA, royalties (other than copyright) are taxable at 15% in India - lower than the standard 20% applicable without DTAA. The US company must furnish a Tax Residency Certificate and Form 10F to claim the lower rate.
Is DTAA relief available to US LLCs receiving income from India?▾
The India-US DTAA is one of the few India treaties that contains a Limitation on Benefits clause. US LLCs must qualify under the treaty's LOB provisions (public company test, ownership/base erosion test, etc.) to be entitled to DTAA benefits. Consult a tax advisor for specific structures.
Browse all articles
20 articlesArticle 1 of the India-United States DTAA governs persons covered.…
Article 4 of the India-United States DTAA governs resident.…
Article 5 of the India-United States DTAA governs permanent establishment.…
Article 7 of the India-United States DTAA governs business profits.…
Article 8 of the India-United States DTAA governs shipping, inland waterways, and air transport.…
Article 9 of the India-United States DTAA governs associated enterprises.…
Dividends paid by a company resident in one State to a resident of the other State may be taxed in the recipie…
Interest arising in one State and paid to a resident of the other may be taxed in the recipient's State, with …
Royalties paid to a resident of the other State may be taxed in the recipient's State; the source State retain…
FTS - payments for managerial, technical, or consultancy services - are taxed at the treaty rate where a speci…
Article 13 allocates taxing rights over capital gains between India and United States.…
Article 14 of the India-United States DTAA governs independent personal services.…
Article 15 sets the taxing rights for salaries earned by an employee of one State who works in the other.…
Article 17 of the India-United States DTAA governs artistes and sportspersons.…
Article 18 of the India-United States DTAA governs pensions.…
Article 19 of the India-United States DTAA governs government service.…
Article 23 sets out the mechanism by which double taxation is eliminated - typically through a foreign tax cre…
MAP allows the competent authorities of India and United States to resolve disputes - particularly transfer pr…
Allows the competent authorities to exchange information necessary to apply the treaty or domestic tax laws.…
Treaty benefits are denied where the principal purpose of the transaction was to obtain them.…
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