Section 90 - Agreement with foreign countries or specified territories - Income-tax Act, 1961

CHAPTER IX DOUBLE TAXATION RELIEF 8 [Agreement with foreign countries or specified territories. 90. (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,- (a) for the granting of relief in respect of- (i) income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or (ii) income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, 15 [ without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory), ] or (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or (d) for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement. (2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee. 10 [***] 11 [(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him.] (3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf. 9 [ (4) An assessee, not being a resident, to whom an agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless 12 [a certificate of his being a resident] in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory. [(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed.] Explanation 1.- For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company. Explanation 2.- For the purposes of this section, specified territory means any area outside India which may be notified as such by the Central Government. ] 9 [Explanation 3. - For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1) and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force. ] 14 [ Explanation 4. For the removal of doubts, it is hereby declared that where any term used in an agreement entered into under sub-section (1) is defined under the said agreement, the said term shall have the same meaning as assigned to it in the agreement; and where the term is not defined in the said agreement, but defined in the Act, it shall have the same meaning as assigned to it in the Act and if any, explanation given to it by the Central Government. ] ------------------------------ Notes :- 1. Substituted by the Finance Act, 1972, w.e.f. 1-4-1972. 2. Renumbered by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1972. 3. Substituted by the Finance Act, 2003, w.e.f. 1-4-2004. Prior to its substitution, clause (a) read as under : (a) for the granting of relief in respect of income on which have been paid both income-tax under this Act and income-tax in that country, or 4. Inserted by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1972. 5. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004. 6. Inserted by the Finance Act, 2001, w.r.e.f. 1-4-1962. 7. Words , where such foreign company has not made the prescribed arrangement for declaration and payment within India, of the dividends (including dividends on preference shares) payable out of its income in India omitted by the Finance (No. 2) Act, 2004, w.r.e.f. 1-4-1962. 8. Substituted vide Finance (No.2) Act, 2009, w.e.f. 1-10-2009, before it was read as, 1 [Agreement with foreign countries. 90. 2 [ (1) ] The Central Government may enter into an agreement with the Government of any country outside India- 3 [ ( a ) for the granting of relief in respect of- ( i ) income on which have been paid both income-tax under this Act and income-tax in that country; or ( ii ) income-tax chargeable under this Act and under the corresponding law in force in that country to promote mutual economic relations, trade and investment, or ] ( b ) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country, or ( c ) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance, or ( d ) for recovery of income-tax under this Act and under the corresponding law in force in that country, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement. ] 4 [ (2) Where the Central Government has entered into an agreement with the Government of any country outside India under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee. ] 5 [ (3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf. ] 6 [ Explanation .- For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company 7 [ *** ].] 9. Inserted vide Finance Act, 2012, w.e.f. 01-4-2013. 10. Omitted vide Finance Act 2013 , before it was read as (2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee, even if such provisions are not beneficial to him . 11 . Inserted vide Finance Act 2013, w.e.f. 1st day of April, 2016. 12. Substituted vide Finance Act 2013, w.e.f. April 1, 2013 , before it was read as; a certificate, containing such particulars as may be prescribed, of his being a resident 13 . Inserted vide Finance Act 2013, w.e.f. April 1, 2013 . 14. Inserted vide THE FINANCE ACT, 2017 w.e.f. 1st day of April, 2018 15. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2021