Disclaimer: The content of this article is exclusively for information and does not constitute a board or conception of the law and is a personal opinion of the author. It is based on the relevant laws and/or facts available at that time and is established with the necessary precision and reliability. Readers are invited to review and refer the relevant provisions of the statute, the latest judicial statements, circulars, clarifications, etc. before acting on the basis of the above letters. The possibility of other views on this subject cannot be ruled out. By using this information, you agree that the author/TaxGuru is not responsible for authenticity, accuracy, completeness, integrity, error or omission in this information for all actions taken in it. This is not a type of professional advertising or incentive to work. International double taxation has a negative impact on trade and services, as well as on capital and the transportation of people. Taxation of the same income by two or more countries would be a prohibitive burden on the taxpayer. The national laws of most countries, including India, alleviate this difficulty by providing unilateral relief to these double-taxed incomes (Section 91 of the Income Tax Act).
However, since this solution is not satisfactory, given the diversity of rules governing the determination of sources of income in different countries, tax treaties seek to remove tax barriers to trade and services, as well as capital movements and the movement of people between the countries concerned. It contributes to the improvement of the overall investment climate. The process of applying a double taxation agreement can be subdivided into a series of steps on the different types of provisions. 6. Apply the feature article: The feature articles generally take one of the three forms of OECD model, the UN model, the standard model and the Andean model are few of these models. Of these, the first three are the most important and most commonly used models. However, a final agreement could be a combination of different models. 3. prevents international tax evasion and evasion; 7. Application of the provisions on the elimination of double taxation: each of the material items must be taken into account with Article 23, which defines the methods for eliminating double taxation.