Double Taxation avoidance agreement is entered between two countries to avoid dual taxability of the same income in 2 countries. Section 90 of Income Tax Act, 1961, permits the central government to enter into agreement with any other country to avoid double taxation and maintain mutual economic relations, trade and investments. In accordance with Double Taxation Avoidance Agreement (DTAA), Income is taxed in only one country and the assessee is not required to pay tax in another country.