|Consider the following statements|
|The advantage of DTAA (Double Taxation Avoidance Agreements) are|
|1. Lower withholding of taxes (tax deduction at source).|
|2. Complete exemption of income from taxes.|
|3. Underlying tax credits.|
|4. Tax sparing credits.|
|Which of the advantages given above are correct?|
A) 1 and 2
B) 1, 2 and 3
C) 2 and 3
D) All of these
Correct Answer: D
Solution :[d] The DTAA is essentially a bilateral agreement entered into between two countries. The basic objective is to avoid taxation of income in both the countries and to promote and foster economic trade and investment between the two countries.
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