Unlike most countries this platform covers, no Double Taxation Avoidance Agreement exists between India and Guyana, so relief against double taxation is available only under Section 91 of the Income Tax Act, 1961 -- unilateral relief at the lower of the Indian or the foreign tax rate on the same income.
No India-Guyana DTAA -- what that means in practice
A search of the Income Tax Department's comprehensive-agreements list found no Double Taxation
Avoidance Agreement between India and Guyana. This is a genuine point of contrast with most other
countries this platform covers, which generally have a DTAA setting agreed, reduced withholding rates on
dividends, interest, royalties, and fees for technical services. Without a treaty, income earned in one
country by a resident of the other can, in principle, be taxed in both, with no treaty-based reduced rate
available on either side.
Section 91 unilateral relief -- the fallback mechanism
In the absence of a DTAA, an Indian resident who has paid tax in Guyana on income also taxable in India
can claim relief under Section 91 of the Income Tax Act, 1961. This unilateral relief is calculated at the
lower of the Indian tax rate or the foreign (Guyanese) tax rate applicable to that income, rather than the
more favourable treaty-based mechanisms (Sections 90/90A) available for countries with a DTAA. An NRI or
Guyana-connected taxpayer with income touching both countries should evaluate this calculation with a
chartered accountant familiar with Section 91, since the relief available can differ meaningfully from
what a DTAA would otherwise provide.
Section 195 TDS on Indian-source income
For Indian-source income paid to a non-resident, including someone resident in Guyana, the payer must
generally deduct tax at source under Section 195 of the Income Tax Act, at rates set by the Act itself
since no treaty-based reduced rate is available for Guyana. A lower or nil-deduction certificate under
Section 197 can be sought from the jurisdictional Assessing Officer where the actual computed tax liability
is lower than the standard withholding rate, on the same basis as for NRIs in other countries.
Common mistakes in this area for NRIs connected to Guyana:
- Assuming a DTAA-style reduced withholding rate applies to India-Guyana income flows, when no such
treaty exists.
- Not evaluating Section 91 unilateral relief correctly, since it works differently from the
treaty-based relief available for most other countries this platform covers.
- Overlooking the Section 197 lower-deduction certificate route for Indian-source income where the
actual tax liability is lower than the standard Section 195 rate.
