Relief u/s 91 of the Income-tax Act, 1961. - Income Tax - 992/CBDT

INSTRUCTION NO. 992/CBDT Dated : July 29, /1976 Section(s) Referred: 91 Statute: Income - Tax Act, 1961 The admissibility of relief u/s 91 of the Income-tax Act, 1961, in the case of a partner in respect of his proportionate share of Income-tax paid by the firm in a foreign country on its income which accrued or arose during the previous year outside India has been examined in consultation with the Ministry of Law. 2. Unilateral relief from double taxation is admissible u/s 91 of the Income-tax Act, 1961, inter alia, if the following conditions are satisfied:- (a) the assessee is resident in India in the previous year; (b) the income accrued or arose during the previous year outside India, (and is not demand to accrue or arise in India); (c) the income has been taxed both in India and the foreign country with which there is no agreement u/s 90 for the relief or avoidance of double taxation; and (d) the assessee had paid income-tax in the foreign country. 3. Payment of income-tax by a person in the foreign country in respect of his income which accrued or arose during the previous year outside India is, therefore, a pre-requisite for the grant of unilateral relief from double taxation u/s 91 of the Income-tax Act. Since a firm and its partners are separate taxable entities under the Income-tax Act, 1961, a partner will not be entitled to relief u/s 91 of the Income-tax Act, 1961, in respect of his proportionate share of the Income-tax paid by the firm in the foreign country on the income accruing or arising to the firm outside India.