Double taxation avoidance: Agreement allocates taxing rights between India and Bhutan and provides mechanisms for relief and information exchange. The Agreement between India and Bhutan allocates taxing rights to avoid double taxation and prevent fiscal evasion by defining persons and taxes covered, residence rules, and the roles of competent authorities. It sets out source state and residence state taxation across income categories-notably business profits attributable to a permanent establishment, dividends, interest, royalties, capital gains and employment income-provides methods for elimination of double taxation, mutual agreement and dispute resolution procedures, exchange of information and assistance in tax collection, and a Limitation of Benefits rule denying treaty advantages in cases lacking bona fide economic substance.