DTA

A Double Taxation Agreement (DTA), also referred to as a tax treaty, is a bilateral arrangement between two countries aimed at preventing or reducing the double taxation of the same income or investment. It clearly outlines how taxing rights are divided between the participating nations, promotes equitable taxation, and encourages international trade and investment by providing certainty and relief to taxpayers.

Example: Under the India–USA Double Taxation Agreement (DTA), income earned by a resident of India in the United States may be taxed in one country, while the other grants a corresponding tax credit or exemption to prevent double taxation.