DTAA on property income: US + UK + UAE worked examples

TL;DR

India has DTAA with 90+ countries — prevents double taxation of property income and capital gains.
US + India: progressive treaty; capital gains taxable in India, US provides credit.
UK + India: residence-based; rental income taxable in country of residence, credit mechanism.
UAE + India: no personal tax in UAE; India-side tax applies without DTAA credit.

US-India DTAA (Convention 1989)

Article 13 (capital gains): gains from Indian immovable property taxable in India. US gives foreign tax credit (FTC) for India tax paid. Article 6 (rental income): taxable in India; US credit applies. Practical effect for US-based NRIs: pay India tax + claim FTC on US return — no double tax but accountant cost.

UK-India DTAA

Similar structure but UK uses exemption method for Indian property income in some bilateral scenarios. Rental income: India tax + UK credit. Capital gains: taxable in India, UK credit applies under Article 14. Worked example: sell property for £500k gain, India TDS £100k (20% LTCG), UK would charge up to £140k (CGT 28%), net UK liability after India credit £40k.

UAE-India DTAA

UAE has no personal income tax, so DTAA is about avoiding India double-tax rather than UAE credit. India tax applies fully on capital gains and rental. UAE-based NRIs face the “lowest-hassle, highest-effective-rate” scenario — all tax is India-side, no credit relief.

FAQs

How do I claim DTAA benefits?

File Form 10F (self-declaration) + TRC (Tax Residency Certificate from your country’s tax authority) with the Indian buyer or bank before sale. Without these, TDS is at default 30% + surcharge + cess.

Does DTAA apply to inherited property?

Yes, but with nuances — inheritance itself is not taxable in India, but subsequent sale triggers capital gains with cost-basis = fair market value on date of inheritance. DTAA applies to the gain.

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