How can NRIs Avoid Double Taxation?

What is Double taxation?

Double taxation is getting taxed twice on the same income in the two different countries.

Methods to Claim Tax relief under Double taxation?

NRIs can avoid double taxation and can obtain relief by signing a Double taxation avoidance agreement between the two countries.

How can NRIs Avoid Double Taxation?

There are two methods to claim tax relief under DTAA –

Exemption Method

Under exemption method, NRI’s are taxed only in one country and exempted for tax in another country.

Tax Credit Method

Under tax credit method, NRI’S income is taxed in both the countries but he has the option to avail exemption in the country of residence.

Deduction Method

Under this method, Tax you paid in the source country is deducted from your worldwide income and tax is levied on the remaining amount.

Comparison between Exemption Method, Tax Credit Method and Deduction Method to claim tax relief

S. No. Particulars Tax credit method Exemption method Deduction method
1 Source country income 4000 4000 4000
2 Resident country income 4000 4000 4000
3 Exemption deduction (Tax paid in foreign country) (4000) (600)
4 Total income 8000 4000 7400
5 Total tax payable in country of residence on total income (Assume 20%) 1600 800 1480
6 Tax paid in source country on foreign source (income assume 15%) 600 600 600
7 Tax payable in resident country on foreign source income (Assume 20%) 800 - 680
8 Relief available under DTAA (lower of 6 & 7) 600
9 Balance tax payable in country of residence (4-7) 1000 800 1480
10 Total tax paid 1600 800 2080
MEET US

What Clients Say

Customer delight is our main goal and we are very serious about it.


Prakash Verma

Prakash Verma

“Finacbooks.com is a perfect example of a great customer service dealing with the best of accountancy services.“

Prakash Verma Signature


Praveen Chauhan

Praveen Chauhan

“They offered us good quality services in a least possible time at a best Price.“

Praveen Chauhan Signature


Pradeep Kochhar

Pradeep Kochhar

“Finacbooks.com is a trusted network of highly qualified accounting professionals who not only provided us quality accountancy services but also supported us by answering our each & every query on time without any delay. “

Pradeep Kochhar Signature

Informational, useful and resourceful

Blogs

Catch up our trending topics, news etc. in a simple, detailed and most professional way.

How to Apply for Aadhar Card? Aadhar Services & Information Online
15 Jun, 2018

Aadhaar is a simple 12-digit number generated based on the demographic and biometric data of each individual. Established in 2016, UIDAI... Read More

How to check EPF Balance online?
22 Mar, 2018

Employee Provident Fund If you were scouring through the internet trying to learn how to check EPF balance online, you’ve made... Read More

What is POMIS? Is the Post Office Monthly Income Scheme Beneficial?
13 Apr, 2022

Like most banks in India, the Post Office is also a reliable place to deposit money and undergo other transactions. You will particularly... Read More

Due Dates

  • Due date for deposit of Tax deducted/collected for the month of April, 2022. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan

    May 07th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of March, 2022

    May 15th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of March, 2022

    May 15th ,2022
  • Due date for issue of TDS Certificate for tax deducted under section 194M in the month of March, 2022

    May 15th ,2022
  • Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of April, 2022 has been paid without the production of a challan

    May 15th ,2022
  • Quarterly statement of TCS deposited for the quarter ending March 31, 2022

    May 15th ,2022