A CRITICAL ANALYSIS OF THE CONCEPT OF DOUBLE TAXATION AVOIDANCE AGREEMENT UNDER THE INCOME TAX ACT, 1961

ABSTRACT
Double taxation arises when the same income, asset, or financial transaction is subject to tax
in more than one jurisdiction, often creating a significant burden for individuals and businesses
engaged in cross-border activities. To alleviate this issue, countries enter into Double Taxation
Avoidance Agreements (DTAAs), which are treaties designed to prevent the same income from
being taxed twice. These agreements typically provide mechanisms such as tax exemptions or
foreign tax credits to ensure fair taxation. The foundation for modern DTAAs was laid by the
League of Nations in 1928 with the introduction of the first Model Bilateral Convention, which
continues to influence treaty frameworks today. This paper explores the concept of double
taxation, the role and structure of DTAAs, and the practical methods used to mitigate tax
liabilities, thereby facilitating international trade and investment.
Keywords: Double Taxation, Double Taxation Avoidance Agreements (DTAAs), Tax
Treaties, Cross-Border Transactions, Model Bilateral Convention