COMPARATIVE STUDY OF THE KEY PROVISIONS IN DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UNITED STATES

AUTHOR –KSHEMA B REDDY, STUDENT AT CHRIST (DEEMED TO BE UNIVERISITY)

BEST CITATION – KSHEMA B REDDY, COMPARATIVE STUDY OF THE KEY PROVISIONS IN DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UNITED STATES, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 4 (1) OF 2024, PG. 330-339, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT:

Double Taxation Avoidance Agreements (DTAAs) play a crucial role in facilitating cross-border trade and investments by alleviating the burden of double taxation on the income of individuals and enterprises operating in multiple jurisdictions¹. This comparative study critically examines the key provisions of the Double Taxation Avoidance Agreement between India and the United States, aiming to assess their impact on bilateral economic relations and cross-border investments between the two countries.

Through an extensive review of existing literature, this study provides an in-depth analysis of the tax systems in India and the United States, highlighting their respective features and complexities². By focusing on the key provisions of the DTAA, including definitions, scope, and the allocation of taxing rights, this research sheds light on the intricacies of the agreement and its implications for taxpayers in both countries³.

The methodology employed in this study involves a comprehensive comparative analysis of the significant provisions of the DTAA between India and the United States. This analysis delves into crucial areas such as the treatment of business profits, royalties, dividends, and capital gains, aiming to identify divergences, similarities, and potential areas of contention in the interpretation and application of the agreement⁴.

The findings of this comparative study reveal nuanced differences in the approaches taken by India and the United States in addressing various aspects of international taxation, as reflected in the provisions of the DTAA. While some provisions demonstrate a convergence of interests and efforts to foster mutual cooperation in tax matters, others highlight discrepancies that may potentially lead to conflicts and disputes between the two nations⁵.

The discussion section of this study delves into the implications of the identified differences in the DTAA provisions for cross-border investors and multinational corporations operating between India and the United States. It also addresses the potential challenges and opportunities arising from the interpretation and implementation of the agreement, considering the evolving nature of international tax laws and regulations⁶. However, this study underscores the significance of the Double Taxation Avoidance Agreement between India and the United States in promoting bilateral economic cooperation and trade relations. While highlighting the strengths and weaknesses of the existing provisions, the study provides recommendations for enhancing the effectiveness of the agreement, emphasizing the importance of fostering greater transparency, collaboration, and clarity in the interpretation of the provisions to avoid potential disputes and ensure a conducive environment for cross-border investments and economic growth between the two nations⁷.