Double taxation is a financial burden that can discourage cross-border trade and investment. The good news is that India and the UK have entered into a Double Taxation Agreement (DTA), which aims to eliminate the double taxation of income and capital gains arising in one country, but paid to residents of another country.

The DTA between India and the UK was signed on September 25th, 1993, and came into force on November 1st, 1994. According to the treaty, the provisions of the DTA shall apply to persons who are residents of one or both of the contracting states. The agreement covers direct taxes imposed by the two countries, which means income tax, corporation tax, and capital gains tax.

The main objective of the DTA is to provide relief from double taxation of income and capital gains that arise in one country but are taxed in another. Under the agreement, taxable events such as dividends, interest income, royalties, and capital gains are subject to provisions that determine the allocation of tax rights between the two countries.

For instance, if a UK resident has income arising in India, the DTA will allow the resident a credit for any Indian tax paid against the tax payable in the UK on the same income. This credit is subject to the provisions of the UK tax law concerning the allowance of a credit for foreign tax.

Similarly, if an Indian resident earns income from the UK, the DTA allows the resident to claim a credit for any UK tax paid against the tax payable in India on the same income. This credit is subject to the provisions of the Indian tax law concerning the allowance of a credit for foreign tax.

It is important to note that the DTA applies only to residents of India and the UK and not to non-residents. Also, the agreement does not cover indirect taxes such as value-added tax (VAT), sales tax, customs duty, or excise duty.

In conclusion, yes, India has a Double Taxation Agreement with the UK. The agreement provides for relief from double taxation, especially for residents of both countries. It is important for businesses and individuals doing business between India and the UK to understand the provisions of the DTA to avoid being taxed twice on the same income.