Double taxation agreement: Between India and U. S. A. - PRESS NOTE - Income Tax

Double taxation agreement: Between India and U. S. A. Notification Number: PRESS NOTE Dated 12-09-1989 A Convention between the Government of the Republic of India and the Government of the United States of America for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was signed today, the 12th September, 1989, at New Delhi. Dr. N. K. Sengupta, Secretary, Department of Revenue in the Ministry of Finance, signed it on behalf of the Government of India. H. E. Dr. John R. Hubbard, Ambassador of U. S. A. to India, signed it on behalf of the Government of U. S. A. 2. Under this Convention, business profits of an enterprise of one country shall be taxable in the other country only if it maintains a permanent establishment like branch, office, factory, place of management, etc., in that other country. 3. The Convention provides for mutual exemption of aircraft and shipping profits of the enterprises of the two countries. Dividends, interest, royalties and fees for certain services will be taxed in the source country at concessional rates as laid down in the Convention. 4. The Convention will come into force upon the exchange of notes between the two countries notifying the completion of their respective legal procedures to bring the Convention into force. This Convention, concluded after nearly thirty years of negotiations, will not only stimulate the growth of bilateral economic relations between U. S. A. and India, but is expected to promote investments and exports and also encourage the flow of new technology in important areas, and to that extent help in the further growth of Indian economy. It is an important landmark in the history of the relationship between the two countries. [Issued by the Government of India, Ministry of Finance (Department of Revenue), New Delhi, dated 12th September, 1989.]