Abstract

The India-UAE Double Taxation Avoidance Agreement (DTAA), established under Section 90 of the Income Tax Act, 1961, aims to prevent double taxation and ensure equitable tax treatment. However, complexities like "double-dipping" — where taxpayers exploit legal ambiguities to claim deductions in both jurisdictions — pose significant challenges. This research examines the legal frameworks, judicial interpretations, and case studies, such as CIT v. Patni Computer Systems, to analyze the loopholes in the current taxation regime. Focusing on the India-UAE DTAA, the study critiques the efficacy of the "credit method" for tax elimination, which may inadvertently enable double-dipping. The paper offers recommendations to refine legislative and administrative mechanisms, including explicit prohibitions against double-dipping, enhanced collaboration between tax authorities, and robust taxpayer education. These measures aim to uphold the DTAA's integrity while fostering fiscal cooperation and preventing tax base erosion.

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