Most NRI business owners we work with assume the India-US Double Taxation Avoidance Agreement (DTAA) automatically prevents double taxation. It doesn't - it prevents double taxation if you claim it correctly, and the claiming process is where most self-filed and poorly-advised returns go wrong.
The three mistakes we see most often:
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Treating "tax paid" as automatically creditable. Foreign tax credit under the DTAA requires matching income heads between the two jurisdictions, not just matching totals. For example, Rental income taxed as passive income in the US but reported as business income in India (in case of an actual business) can create a mismatch that limits the credit you can actually claim, even though tax was genuinely paid on both sides.
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Missing the residency test nuance. "NRI status" under FEMA and "resident status" under the Income Tax Act are not the same test, and they don't always agree. We regularly see business owners who are non-resident for banking and investment purposes but resident (and therefore taxed on global income) for Indian tax purposes, because they crossed 182 days in India during a visit-heavy year.
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Filing Form 67 late, or not at all. Foreign tax credit claims require Form 67 to be filed before the ITR due date in most interpretations - not after, and not "whenever convenient." A credit that should have offset real tax liability gets denied on a technicality that costs nothing to avoid.
What this means practically: if you're running a business or holding income-generating assets in both countries, treaty relief isn't a form you fill in once - it's a filing discipline that has to be maintained every year, matched carefully to how income is characterised on both sides.