Section - 90, Income-tax Act, 1961 - FA, 2023

CHAPTER IX
DOUBLE TAXATION RELIEF
53[Agreement with foreign countries or specified territories.
54 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, 55[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 corres-ponding 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.
56[(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 notification57 issued by the Central Government in the Official Gazette
in this behalf.
58[(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 59[a certificate60 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.]
61[(5)The assessee referred to in sub-section (4) shall also provide such other documents and information, as
may be prescribed62.]
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 notified63 as such by the Central Government.]
64[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.]
65[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 explanation, if any, given to
it by the Central Government.]

53. Substituted by the Finance (No. 2) Act, 2009, w.e.f. 1-10-2009. Prior to its substitution, section 90, as
amended by the Finance Act, 1972, w.e.f. 1-4-1972, Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1972,
Finance Act, 2001, w.r.e.f. 1-4-1962, Finance Act, 2003, w.e.f. 1-4-2004 and Finance (No. 2) Act, 2004,
w.r.e.f. 1-4-1962, read as under :
"90. Agreement with foreign countries.—(1) The Central Government may enter into an agreement with
the Government of any country 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
(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.
(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.
(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.
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."
54. For notified agreements for avoidance of double taxation, log on to www.taxmann.com.
 See also Circular No. 333, dated 2-4-1982 (Agreement should prevail over statutory provision), Circular
No. 638, dated 28-10-1992 (Agreement with Canada), Circular No. 659, dated 8-9-1993 (Agreement
with Germany), Circular No. 682, dated 30-3-1994, Circular No. 789, dated 13-4-2000 and Circular No.
1/2003, dated 10-2-2003 (Agreement with Mauritius), Instruction No. 3/2004, dated 19-3-2004 and
Instruction No. 3/2015, dated 10-4-2015 (MAP with UK), Instruction No. 10/2007, dated 23-10-2007
(MAP with USA), Instruction No. 7/2008, dated 24-6-2008 (MAP with Denmark), Notification No.
S.O. 2123(E), dated 28-8-2008 [Notification issued under section 90(3)] Instruction No. 1/2013, dated
17-1-2013 (Exchange of information for tax purposes with Foreign Jurisdictions), Letter F.No.
500/36/2015-FTD.I, dated 24-4-2015 (Claim of treaty benefits by FIIs under DTAA provisions),
Circular No. 2/2016, dated 25-2-2016 (Benefit of India-UK DTAA to UK partnership firms), Instruction
No. 1/2017, dated 4-1-2017 (MAP with Sweden), Letter F. No. 500/09/2016-APA-I (MAP Guidance),
dated 7-8-2020, Circular No. 3/2022, dated 3-2-2022 (Clarification regarding Most Favoured Nation
(MFN3) clause in protocol to India's DTAAs with certain countries) and MAP Guidance (MAP
Guidance 2022). For details, see Taxmann's Master Guide to Income-tax Act.
For relevant case laws, see Taxmann's Master Guide to Income-tax Act.
See also rule 44G [Application seeking to give effect to the terms of any agreement under clause (h) of
sub-section (2) of section 295 and the procedure for giving effect to the decision under the agreement]
and Form No. 34F.
See also rule 128 and Form No. 67 (Foreign Tax Credit).
55. Inserted by the Finance Act, 2020, w.e.f. 1-4-2021.
56. Inserted by the Finance Act, 2013, w.e.f. 1-4-2016. Earlier, sub-section (2A) was inserted by the
Finance Act, 2012, w.e.f. 1-4-2013 and later on omitted by the Finance Act, 2013, w.e.f. 1-4-2013. Prior
to its omission, sub-section (2A) read as under :
"(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."
57. See Notification No. SO 2123(E), dated 28-8-2008. For details, see Taxmann's Master Guide to Income-
tax Act.
58. Inserted by the Finance Act, 2012, w.e.f. 1-4-2013.
59. Substituted for "a certificate, containing such particulars as may be prescribed, of his being a resident"
by the Finance Act, 2013, w.e.f. 1-4-2013.
60. See rule 21AB(3) and (4) and Form Nos. 10FA and 10FB.
61. Inserted by the Finance Act, 2013, w.e.f. 1-4-2013.
62. See rule 21AB(1) to (2A) and Form No. 10F.
63. For specified territories, see Taxmann's Master Guide to Income-tax Act.
64. Inserted by the Finance Act, 2012, w.r.e.f. 1-10-2009.
65. Inserted by the Finance Act, 2017, w.e.f. 1-4-2018.