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Countries with which no agreement exists - Unilateral Agreements - Section 91 - International Taxation - Income TaxExtract Countries with which no agreement exists - Unilateral Agreements - Section 91 Normal Provision - Relief under section 91 would be granted in case of an assessee whose income arising in any country with which India does not have double taxation agreement under section 90 , provided all the following conditions are fulfilled :- The assessee is a resident in India during the previous year in respect of which the income is taxable. The Income accrues or arises to him outside India. The income is not deemed to accrue or arise in India during the previous year. The Income in question has been subjected to Income Tax in the foreign country in the hands of the assessee. The assessee has paid tax on the income in the foreign country. There is no agreement for relief from double taxation between India and the other country where the income has accrued or arisen. In such a case, the assessee shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal. In case of income from Pakistan - If any person who is resident in India in any previous year proves that in respect of his income which accrued or arose to him during that previous year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him- of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or of a sum calculated on that income at the Indian rate of tax. In case of Non-Resident - If any non-resident person is assessed on his share in the income of a registered firm assessed as resident in India in any previous year and such share includes any income accruing or arising outside India during that previous year in a country with which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of the income so included he shall be entitled to a deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal. Computation of amount of Relief U/s 91 Step1 : Compute NTI (Indian + Foreign Income) Step 2: Find out tax of NTI (before claiming TDS/TSC, Advance Tax, MAT/AMT Credit benefits but after adding surcharge HEC) Step 3: Find out Average rate of Tax on NTI = (Tax calculated in step 2 * 100) / NTI Step 4: Find out Rate at which tax paid/deducted in Foreign Country Step 5: Find out lower rate from Step 33 Step 4. Step 6: Relief u/s 91 = Foreign Income 8 Rate in Step 5. Important Terms Indian rate of tax means the rate determined by dividing the amount of Indian income-tax after deduction of any relief due under the provisions of this Act but before deduction of any relief due to the assessee; Rate of tax of the said country means income-tax and super-tax actually paid in the said country in accordance with the corresponding laws in force in the said country after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country.; Income-Tax in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.
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