DTAA Between India And France: Tax Relief, TDS Rules & Benefits in 2025

The Double Taxation Avoidance Agreement, or DTAA, between India and France, is a formal treaty designed to prevent individuals and businesses from being taxed on the same income in both nations. This agreement is crucial for Non-Resident Indians (NRIs), investors, and companies operating across these two countries. It establishes clear rules for taxation, offers tax credits, and specifies lower tax rates on certain incomes, thereby encouraging smoother trade and investment flows and ensuring a fair and predictable tax environment for everyone involved. This bilateral convention is a cornerstone of the economic relationship between the two nations, providing stability and clarity for taxpayers.

DTAA Between India and France - Quick Information

For a quick reference, the table below summarises the essential details of the tax treaty established between India and the French Republic.

Objective of the DTAA Between India and France

The primary objective of the India-France DTAA is to eliminate the burden of double taxation, where the same income could be taxed in both countries. This treaty aims to foster greater economic cooperation, trade, and investment between the two nations. It also provides a framework for preventing tax evasion and ensures a fair and equitable system for taxing cross-border income for residents of both countries.

Key Features of India-France DTAA

The agreement has several essential features that define its application and benefits for taxpayers. Let's explore the key aspects of the DTAA between France and India.

Scope of the agreement

In India, this covers income tax (including any surcharge), surtax, and wealth tax. For France, it includes income tax, corporation tax, and wealth tax. The treaty also ensures that it will apply to any identical or substantially similar taxes that are introduced after the agreement was signed, keeping it relevant for the future. [1][4]

Who can claim DTAA benefits (residents, companies, trusts, etc.)?

The benefits of the DTAA between France and India are accessible to any 'person' who qualifies as a resident of one or both of the participating countries. The term 'person' is broadly defined to include individual taxpayers, companies, partnerships, trusts, and any other entity that is treated as a taxable unit under the respective national tax laws. This ensures that the treaty's protective measures cover a wide range of cross-border activities. [1][4]

What are the Tax Relief Methods Used in India-France DTAA?

Under this approach, if a resident of India earns income in France, India will allow a deduction from its tax based on the tax paid in France. Similarly, France provides a credit for taxes paid in India. For certain types of income, the exemption method may be used, where one country relinquishes its right to tax the income entirely. Understanding the general income tax rules for NRIs provides a good foundation. [1][4]

DTAA Rates Between India and France

A significant advantage of the agreement is the concessional tax rates on specific types of income, which are generally lower than the standard domestic rates. [2]

What are the Documents required to claim DTAA TDS

To benefit from the lower Tax Deducted at Source (TDS) rates under the DTAA between India and France, a non-resident must provide specific documents to the payer.

• Tax Residency Certificate (TRC) from the home country's tax authorities.
• Self-attested copy of the Permanent Account Number (PAN) Card.
• A completed and signed Form 10F.
• A self-declaration or indemnity form confirming residency status. [3]

How to Claim DTAA Benefits?

Claiming the benefits of the DTAA involves following specific procedures depending on your country of residence and where the income is earned.

In India (for Indian residents earning in France)

• Declare Global Income: When you file your annual NRI income tax return, you are required to report all your income, regardless of where it was earned. This includes any salary, business profits, or other income from France.[7]
• Provide Proof of Tax Paid: You must furnish proof of the taxes you have already paid in France on that specific income. This is typically done through official tax payment receipts or statements issued by the French tax authorities. [1]
• File Form 67: To claim the Foreign Tax Credit (FTC), it is mandatory to file Form 67 online before filing your income tax return. This form details the foreign income and the tax paid on it. [8]
• Claim Credit in ITR: In your Income Tax Return (ITR), you can then claim a credit for the taxes paid in France. This credit will be set off against your Indian tax liability, ensuring you do not pay tax twice on the same earnings. You may also want to understand the difference between NRE and NRO accounts for managing such funds. [1]

In France (for NRIs earning in India)

• Submit Residency Proof in India: To avail the lower tax rates in India, you must first prove that you are a tax resident of France. This is done by submitting a Tax Residency Certificate (TRC) obtained from the French tax authorities to the Indian payer. You also need to provide a PAN card and a filled Form 10F. [11]
• Ensure Lower TDS Deduction: Once these documents are submitted, the Indian entity (like a bank paying interest or a company paying dividends) will deduct tax at the concessional rate specified in the DTAA between India and France TDS rates, which is typically 10%. Obtaining a lower TDS certificate for NRIs can also streamline this process. [10]
• Report in French Tax Return: When you file your taxes in France, you must report the income earned from India.
• Claim Tax Credit in France: You can then claim a tax credit in France for the taxes that were deducted in India, in accordance with French domestic tax laws and the provisions of the DTAA. For managing assets, a good NRI power of attorney guide is invaluable.[4]

DTAA TDS Rate Chart (2025) – India-France

When an Indian entity makes a payment to a resident of France, Tax Deducted at Source (TDS) applies. The DTAA caps the DTAA TDS rates to prevent excessive withholding, as shown below. [2]

DTAA Impact on NRIs and Investors

The DTAA between India and France has a significant positive impact on NRIs and investors by providing tax certainty and reducing the cost of cross-border business.

• Reduced Tax Burden: NRIs in France earning rental income from India can offset Indian taxes against French liabilities, avoiding double taxation and lowering overall costs. This is key in financial planning for those owning overseas property, and many seek specialized NRI property services owners.[1][4][5]
• Lower Withholding Taxes: The agreement caps TDS at 10% on dividends, interest, and royalties, avoiding higher domestic taxes without DTAA. This lower rate improves cash flow and investment profitability. The taxation rules for NRO accounts are also affected by this. [1]
• Clarity on Capital Gains: Article 14 states that gains from selling immovable property are taxed where the property is located, clarifying rules and aiding NRIs’ tax planning. NRIs should conduct legal due diligence before investing in Indian real estate. [1][4]
• Encourages Investment and Business: The France-India DTAA provides a stable tax environment, preventing double taxation on profits, boosting confidence in Indian operations. It also encourages NRIs to invest in India, including in top cities for NRI property investment.[1][4]
• Prevention of Tax Evasion: The India-France DTAA includes Exchange of Information provisions, enabling tax authorities to share data, monitor transactions, and prevent income concealment and tax evasion. [1][4]

How NoBroker Can Help with NRI Services?

Navigating the complexities of the DTAA between India and France can be challenging, especially for NRIs managing properties or investments. NoBroker offers specialized NRI services to simplify this process. From property management and rental assistance to legal support and tax compliance, our experts ensure your investments are handled efficiently. We can assist with documentation and guidance on matters such as TDS and capital gains, making your cross-border transactions seamless and compliant.

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