DTAA Between India And Brazil: NRI Tax Benefits, Rates And Compliance 2025

Understanding how the DTAA between India and Brazil works is essential for individuals and companies earning income across these two nations. This agreement ensures that taxpayers do not have to pay taxes twice on the same income, making cross-border trade and investments smoother. It promotes transparency, encourages foreign investments, and strengthens financial cooperation between India and Brazil. 

DTAA Between India and Brazil - Quick Info

This tax treaty provides a structured framework for the taxation of cross-border income, promoting economic cooperation and clarity for taxpayers. [1]

Objective of the DTAA Between India and Brazil

The core purpose of this tax treaty is to foster a stable and predictable tax environment that encourages mutual economic growth and investment. The main objectives of the DTAA agreement between India and Brazil are:

• The primary goal is to ensure that income earned in one country by a resident of the other is not taxed by both jurisdictions, which would otherwise stifle economic activity.
• By providing tax certainty and lower withholding tax rates, the agreement makes it more attractive for companies and individuals from one country to invest in the other.
• The treaty includes provisions for the exchange of information between the tax authorities of both nations, making it difficult for taxpayers to conceal income or evade their tax liabilities.
• It lays down clear rules for how different types of income are to be taxed, which helps businesses and individuals in their financial planning and reduces the likelihood of tax disputes.
• The DTAA clearly defines which country has the right to tax a particular type of income, ensuring a fair distribution of tax revenues between India and Brazil.

Significance of DTAA for India and Brazil

The tax treaty between India and Brazil is of immense strategic importance, strengthening the economic partnership between two of the world's largest emerging economies.

The significance of the agreement includes:

• As key members of the BRICS group, a robust DTAA is fundamental to facilitating the seamless flow of capital and services, which is a core objective of the economic bloc.
• The treaty provides confidence to investors. This is crucial for NRIs considering to buy property in India.
• By setting clear and often lower tax rates on royalties and fees for technical services, the DTAA encourages Indian and Brazilian companies to share technology and expertise, boosting innovation in both countries.
• The agreement provides clear rules for individuals who work in the other country, ensuring their salary income is taxed fairly and predictably.
• A clear tax framework reduces hidden costs and complexities, thereby encouraging and simplifying bilateral trade in goods and services between the two countries. Investors can confidently explore the top cities in India for NRI property investment.

India-Brazil DTAA Tax Rates

A key feature of the treaty is the establishment of maximum tax rates that the source country can levy on specific types of income paid to a resident of the other country. These rates are often lower than the standard domestic rates. [2]

The concessional DTAA rates between India and Brazil provide significant tax relief.

Taxes Covered under DTAA Between India and Brazil

The agreement applies to taxes on income imposed on behalf of both countries, ensuring comprehensive coverage. Understanding which incomes are covered helps in grasping the full scope of the DTAA for income tax.

• Dividends: Income received from shares in a company. The DTAA caps the tax in the source country at 15%, providing relief to shareholders.
• Interest: Income from debt claims of every kind. The treaty limits the tax to 15% in the source country, benefiting lenders and investors. This is important for NRIs managing taxation rules for NRO accounts.
• Royalties: Payments for the use of intellectual property. The India-Brazil treaty has a unique two-tier structure: a higher 25% rate for trademarks and a 15% rate for other royalties like patents and copyrights.
• Salaries: The treaty provides rules (like the 183-day rule) to determine which country has the right to tax salaries.
• Capital Gains: Profits from the sale of assets like property or shares. The DTAA specifies how these gains are to be taxed, which is crucial for property investors.

Taxation on Capital Gains under the DTAA Between India and Brazil

The treaty provides clear guidelines on which country has the right to tax capital gains, an area of great importance for NRIs and international investors involved in property transactions.

Here are the key principles for taxing capital gains under the DTAA between India and Brazil income tax rules:

• Immovable Property: Gains from the sale of immovable property (such as land, houses, or apartments) are taxed in the country where the property is located. This makes understanding the rules for TDS on sale of property by an NRI essential.
• Movable Property of a Permanent Establishment (PE): Gains from selling movable assets that are part of a business's permanent establishment are taxed in the country where the PE is situated.
• Ships or Aircraft: A special rule applies to gains from the sale of ships or aircraft operated in international traffic. These gains are taxable only in the country where the head office of the enterprise is located.
• Other Assets: For gains from the sale of any other assets, such as shares (unless they derive their value from immovable property), the right to tax rests with the country where the seller is a resident. When considering buying a resale home from an NRI, performing legal due diligence is critical.

Taxation on Employment Income Under DTAA

The agreement includes specific rules, commonly known as the "183-day rule," to prevent individuals from paying tax on their salary in both countries.

The rules for taxing employment income are as follows:

• Primary Rule: Salary is generally taxed in the country where the employment is physically carried out.
• Exemption (The 183-Day Rule): The income is taxed only in the individual’s country of residence if all three of the following conditions are met:
  • The individual is present in the country of work for a total of less than 183 days in the concerned fiscal year.
  • The salary is paid by an employer who is not a resident of the country of work.
  • The salary cost is not borne by a permanent establishment that the employer has in the country of work.

What are the Documents required to claim DTAA TDS?

To avail the benefit of a lower tax deduction at source (TDS) rate under the DTAA, you must provide the following documents to the entity paying the income.

• Tax Residency Certificate (TRC)
• Self-attested Form 10F
• Self-declaration of not having a Permanent Establishment (PE) in the source country
• Self-attested copy of your PAN Card

How to Claim DTAA Benefits?

Claiming benefits under the treaty requires following the correct procedures in both countries, including submitting the necessary forms and documents.

In India (for Indian residents earning in Brazil):

• You must report your Brazilian income on your Indian income tax return.
• You can then claim a Foreign Tax Credit (FTC) for the taxes you have already paid in Brazil.
• To claim FTC, you must electronically file Form 67 before the due date for filing your tax return.

In Brazil (for Brazilian residents/NRIs earning in India):

• To get a lower rate of TDS in India, you must provide the Indian payer with your TRC, Form 10F, and other required documents. This is where obtaining a Lower TDS certificate for NRIs can be beneficial.
• When money is sent from India, the Indian remitter must comply with regulations, which often involve filing Form 15CA and 15CB.
• In your Brazilian tax return, you must declare your global income, including the income from India, and claim a credit for the taxes paid in India.

DTAA Impact on NRIs, Investors, and Businesses

The treaty has a significant and positive impact on various stakeholders by creating a more favourable financial environment.

• For NRIs: It simplifies the income tax rules for NRIs by providing clear guidelines and preventing double taxation on their Indian income, such as interest or capital gains. It also provides clarity on matters like gift tax implications for NRIs in India.
• For Investors: The capped tax rates on dividends (15%) and interest (15%) reduce the tax burden, leading to higher net returns and encouraging cross-border investments.
• For Businesses: The treaty provides tax certainty for companies operating in the other country. The "Permanent Establishment" clause ensures tat business profits are not taxed unless the company has a significant and fixed presence in that country.

How NoBroker Can Help with NRI Services?

Managing tax and property matters across borders can be stressful, especially when dealing with the DTAA between India and Brazil and related compliance. NoBroker simplifies the process through its dedicated NRI services, offering end-to-end assistance for tax documentation, legal verification, and real estate management in India. Whether it’s handling property sales, TDS concerns, or understanding DTAA tax relief, our experts ensure clarity and compliance. With personalised guidance, transparent processes, and verified legal partners, NoBroker helps NRIs manage their Indian investments seamlessly, saving time, reducing stress, and ensuring complete legal peace of mind.

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