Cross-border tax asks two questions before anything else: who is resident where, and which country has the right to tax a particular stream of income. Everything else follows from the answers.
This describes the subject in general terms and is not advice; what applies depends on the facts, and the law changes.
Understanding the service
Residential status under Indian law determines the scope of what India taxes. Where a double taxation avoidance agreement applies, it allocates taxing rights and may cap the rate on certain income, subject to the conditions in the treaty and in Indian law.
Payments to non-residents raise withholding questions. Whether tax must be deducted, and at what rate, depends on whether the amount is chargeable to tax in India, on the treaty position, and on the documentation held.
Relief for tax paid abroad, the documentation required to claim treaty benefits, and reporting of foreign assets and income are recurring areas for residents with income outside India.
The Income-tax Act, 2025 has renumbered these provisions, and the forms are being reissued under the rules made under it.
When it becomes relevant
- Payments to a foreign supplier, parent or service provider
- An Indian business with a subsidiary, branch or customers abroad
- A foreign company with operations, staff or customers in India
- An individual moving to or from India, or holding assets abroad
- Claiming credit for tax paid in another country
What the work usually covers
- Determining residential status and the scope of Indian taxation
- Treaty analysis: which article applies and on what conditions
- Withholding on payments to non-residents, and the certification the law requires
- Foreign tax credit claims and the supporting documentation
- Reporting of foreign assets and income by residents
- Coordination with advisers in the other country, whose law we do not opine on
Framework and sources
The law and professional standards this work is carried out under. Links open the official site.
How the work runs
- Establish the factsResidence, the nature of the income, and the countries involved.
- Identify the lawThe Indian provision and the treaty article that apply.
- AssessChargeability, rate, available relief and the conditions attached.
- DocumentAssemble the certificates, declarations and records the position requires.
- ComplyFile the returns, forms and reports, and support the position if questioned.
A general sequence. Engagements differ, and the scope of each is agreed in writing.
Common questions
Does a treaty always reduce the tax?
No. A treaty allocates taxing rights and may limit a rate, but only where its conditions are met and the law allows the benefit to be claimed.
Can you advise on the tax law of another country?
No. We address the Indian position and work alongside advisers qualified in that jurisdiction.
Is withholding required on every foreign payment?
No. It depends on whether the sum is chargeable to tax in India, on the treaty position and on the documentation held. The question is examined before the remittance.