Double Taxation Avoidance — Prelims Strategy
Prelims Strategy
For Prelims preparation on DTAAs, focus on memorizing key factual elements: Article 253 as constitutional basis, Sections 90, 90A, and 91 of Income Tax Act, India's DTAA count (85+ countries), and recent developments like MLI signing and digital taxation measures.
Create a comprehensive list of DTAA concepts with precise definitions - permanent establishment, beneficial ownership, tie-breaker rules, withholding tax rates, and mutual agreement procedure. Pay special attention to recent policy changes including Significant Economic Presence concept, GAAR interaction with DTAAs, and BEPS implementation through MLI.
Practice questions that test the relationship between DTAAs and domestic law, understanding that DTAAs override domestic provisions when more beneficial to taxpayers but are subject to anti-avoidance measures.
Focus on elimination techniques by understanding common traps: confusing DTAAs with TIEAs, misunderstanding the scope of permanent establishment, and incorrectly assuming DTAAs always override domestic law.
Current affairs integration is crucial - track recent DTAA signings, protocol amendments, and international tax policy developments. Create mnemonics for remembering key withholding tax rates and permanent establishment thresholds across major treaty partners.
Practice comparative questions between OECD and UN model conventions, and understand India's pragmatic approach in treaty negotiations.