India and Bhutan have signed a double taxation convention (DBAA) for the avoidance of double taxation and the prevention of fiscal evasion. The convention aims to ensure fiscal stability in order to facilitate mutual economic cooperation and stimulate the flow of investment, technology and services The intention of a double taxation convention is to make a country appear as an attractive investment objective by reducing double taxation. This form of relief is provided by exempting income received abroad from tax in the country of residence or by offering credits to the extent that taxes have been paid abroad. The Double Tax Avoidance Agreement (DBAA) is a tax treaty signed between two or more countries to help taxpayers avoid double taxes on the same income. A DBAA is applicable in cases where a person is resident in one nation but obtains income in another nation. Under the DBA, NRAs do not have to tax income twice: negotiations were concluded in 2011 and the agreement was officially signed on March 4 by Indian Finance Minister Fr Chidambaram and his Bhutanese counterpart Lyonpo Wangdi Norbu. . . .
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