The Double Taxation Avoidance Agreement (DTAA) between India and the USA significantly impacts property transactions for Non-Resident Indians (NRIs). This agreement aims to prevent NRI property tax from being taxed twice on the same income by both countries. The DTAA outlines specific provisions to ensure tax relief, which is crucial for NRIs involved in property transactions.

Under the DTAA, NRIs are subject to tax in their country of residence (USA) as well as the source country (India). However, the DTAA provides methods to alleviate this double. For instance, if an NRI earns rental income from a property in India, both India and the USA have the right to tax this income. The DTAA stipulates that India may levy tax at a concessional rate and the USA will provide a credit for the tax paid in India. This means the NRI can offset the tax paid in India against their tax liability in the USA​.

For capital gains arising from the sale of property in India, the DTAA also comes into play. This ensures that NRIs do not end up paying tax on the same income twice, making it financially feasible to invest in Indian real estate​​.

Overall, the DTAA between India and the USA provides significant tax relief for NRIs, encouraging investment in Indian properties by reducing the overall tax burden. This makes the process of managing property transactions more efficient and financially beneficial for NRIs.