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Double taxation can be a significant issue for many individuals and businesses that operate across borders. If you are a UK resident or business that conducts business in India, you might be curious about whether there is a double taxation agreement between the two countries. In this article, we will explore the double taxation agreement between the UK and India and what it means for you.

Firstly, let`s define what double taxation is. Double taxation is when two countries tax the same income or asset twice. This can happen when a person or business is taxed in the country where the income is earned and is then taxed again in the country where they reside. Double taxation can create a significant financial burden, leading to a reduction in income.

To avoid this, many countries negotiate Double Taxation Agreements (DTAs). These agreements are designed to eliminate or reduce the effects of double taxation for individuals or businesses operating in both countries.

Thankfully, the UK and India do have a double taxation agreement in place. The DTA between the UK and India was signed in 1993 and was updated in 2018. The agreement aims to eliminate double taxation on income earned in both countries by allowing tax paid in one country to be set off against tax due in the other country.

Under the terms of the DTA, if you are a UK resident who has income from India, you will be required to pay tax on that income in India. However, you can claim a credit for the tax you have paid on that income in the UK.

Similarly, if you are an Indian resident with income from the UK, you will be required to pay tax on that income in the UK. However, you can claim a credit for the tax you have paid on that income in India.

The DTA also covers other taxes, such as capital gains tax and inheritance tax. The DTA aims to remove any barriers to trade or investment and promote closer economic ties between the UK and India.

In conclusion, the UK and India do have a double taxation agreement in place, which aims to eliminate double taxation for individuals and businesses operating in both countries. The DTA covers various taxes, including income tax, capital gains tax, and inheritance tax. If you operate in both countries, it is crucial to seek advice from a tax specialist to ensure that you are complying with the relevant tax regulations and making full use of the DTA.