DTAA Relief Explained: TRC, Form 41 (Old Form 10F) and Claiming Treaty Benefits (India–UAE Focus)
If you earn income in India while living abroad, two countries may want to tax it. A Double Taxation Avoidance Agreement (DTAA) is a treaty between India and the other country that decides which country taxes what, and at what maximum rate. India has DTAAs with more than 90 countries, including the UAE, USA, UK, Singapore, Canada and Australia.
How a DTAA helps you
- Lower tax rates in India: treaty rates on dividends, interest and royalties are often lower than India’s domestic rates.
- Exemption: some income can be taxed only in your country of residence.
- Credit for tax paid: where both countries tax the income, your country of residence gives a credit for the tax paid in India, or the other way round.
Under Indian law you can choose whichever is more beneficial: the Income-tax Act or the DTAA. This principle continues under the Income-tax Act, 2025.
India–UAE DTAA: key rates
| Income from India | Domestic TDS for NRIs (approx.) | India–UAE DTAA maximum rate |
|---|---|---|
| Dividends | 20% + surcharge + cess | 10% |
| Interest (e.g. NRO deposits, loans) | 30% + surcharge + cess | 12.5% (5% if paid on a loan from a bank or financial institution) |
| Royalties | 20% + surcharge + cess | 10% |
| Capital gains on Indian property | 12.5% / slab | Taxable in India (the treaty lets India tax gains on property located here) |
Note: the UAE has no personal income tax, so for UAE-based NRIs the Indian tax is usually the final cost. That makes the lower treaty rate especially valuable.
Documents you need to claim treaty benefits
1. Tax Residency Certificate (TRC)
Issued by the tax authority of the country where you live. In the UAE, it is issued by the Federal Tax Authority (through the EmaraTax portal). Without a valid TRC you cannot claim treaty benefits in India.
2. Form 41 (formerly Form 10F)
If your TRC does not include all the required details (status, nationality, tax identification number, residential address, period of residence), you must file Form 41 electronically on the Indian income tax e-filing portal. In practice, most payers ask for it in every case.
3. Self-declaration
Banks and payers usually also ask for a declaration that you have no Permanent Establishment in India and that you are the beneficial owner of the income.
Process: give the TRC, Form 41 and declaration to the payer (bank, company or tenant) before the payment is made, so TDS is deducted at the treaty rate. If TDS has already been deducted at the higher rate, claim the treaty rate in your ITR and get the difference back as a refund.
Foreign tax credit for Indian residents: Form 44 (formerly Form 67)
This works the other way round. If you are an Indian resident earning foreign income that was taxed abroad (for example US dividends or salary from overseas work), you can claim a foreign tax credit in India. You must file Form 44 (formerly Form 67) on the e-filing portal, before filing your ITR, with proof of the foreign tax paid.
Practical tips
- Get your TRC renewed every year. It covers a specific period.
- Check that the period on the TRC overlaps the Indian tax year (April to March).
- Keep copies of everything. A tax officer may check your treaty claims during assessment.
- Treaties now include anti-abuse rules (such as the “principal purpose test”). Arrangements set up mainly to get treaty benefits can be denied them.
Frequently asked questions
Can I claim DTAA benefits without a TRC?
No. A TRC is required by law to claim treaty relief in India.
I live in Dubai. Is my NRO interest taxed at 12.5% or 30%?
Without documents, the bank deducts about 31.2%. If you give a valid UAE TRC and Form 41, the treaty limit of 12.5% can apply.
Do I file Form 41 every year?
Yes, for each tax year in which you claim treaty benefits, together with a valid TRC for that period.
Is the DTAA the same as getting a refund?
No. The DTAA sets the maximum tax. A refund comes through your ITR when more TDS was deducted than the treaty allows.
Living abroad and earning in India? Garvita Jain & Co. handles TRC paperwork, Form 41 filing, treaty-rate claims with banks and payers, and refund claims. Contact us here, or at contact@garvitajainandco.com or +91 98678 16597.
This article is general information based on the law as of October 2026 and is not professional advice. Treaty rates should be checked against the treaty text for your country.
Sources
Official
- Income Tax Department, DTAA texts. Go to incometaxindia.gov.in, then International Taxation, then Tax Treaties (Comprehensive Agreements), then “United Arab Emirates”
- Income Tax e-filing portal (Form 41 / Form 44 filing)
- UAE Federal Tax Authority, Tax Residency Certificate (EmaraTax)
Professional / CA publications