Home Income Tax International Tax Double taxation relief in case of countries with which no agreement exists (Unilateral Agreement)-Section 91

Double taxation relief in case of countries with which no agreement exists (Unilateral Agreement)-Section 91

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Countries with which no agreement exists (Unilateral Agreement)-Section 91(1)

If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country,

he 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.

Relief is lower of following

  • Tax on total income in India x  Doubly Taxed Income                (Indian Rate of Tax)

Total Income

  • Tax paid outside India   x  Doubly Taxed Income    (Foreign country Rate of Tax)

Total Income assessed outside India

Explanation.—In this section,—

(i)  the expression “Indian income-tax” means income-tax charged in accordance with the provisions of this Act;

(ii)  the expression “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 under this Chapter, by the total income;

(iii)  the expression “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;

(iv)  the expression “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.

  • Agreement with Foreign Countries for double taxation relief

    Agreement with foreign countries or specified territories (Bilateral Agreement) -Section 9…
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