India has signed 88 Double Taxation Avoidance Agreements (DTAAs) out of which 85 have entered into force, with various countries including Sri Lanka and South Korea.

The DTAAs provide for allocation of taxation rights to source State and residence State in respect of business profits including that of a permanent establishment, operation of ships or aircraft in international traffic, dividends, interest, royalty, capital gains etc. Further, DTAAs have provisions for exchange of information for tax purposes.

The DTAAs facilitate mutual economic cooperation and provide tax certainty to the resident tax payers of both the countries. Further, the DTAAs aim to avoid the burden of double taxation on the income of residents of the two treaty countries and also simulate flow of investment, technology and services between them.

This was stated by the Minister of State for Finance, Shri S. S. Palanimanickam in a written reply to a question in the Lok Sabha today.

DSM/RS/ka

(Release ID :93330)

Double taxation avoidance agreements allocate taxing rights and provide information exchange to reduce double taxation burdens. Double Taxation Avoidance Agreements allocate taxing rights between source and residence States for categories of income including business profits (profits of a permanent establishment), shipping and air transport operations, dividends, interest, royalties and capital gains, and include exchange of information provisions to assist tax administration and provide tax certainty for residents while facilitating cross-border investment and services.