Journal Press India^®

International double taxation occurs when a taxpayer is resident in one country but has a source of income from another country and tax is imposed by both the countries on the same income. Thus, international double taxation arises due to overlapping of two tax claims of two or more countries. In most cases, individuals work in countries where they live and companies invest and operate in countries in which they are resident. However, world economies are becoming increasingly international and flow of labour, technology and capital from one country to another is common. Multinationals operate in a number of countries, and individual investors possess internationally diversified investment portfolios. Thus, companies and individuals receive foreign income in the form of profits, dividends, management and professional fees and royalties. When a person undertakes cross-border activities or maintains connections in two or more countries, he is likely to encounter the tax laws of another country. That encounter influences the way in which the person is taxed in his home country. This is how the tax systems of different countries get linked with each other. This paper explains and examines the Indian law on double tax relief.