Introduction

In the current business environment, businesses are expending outside the border of countries and becoming global. A lot of foreign companies are operating in India and many Indian companies are operating in foreign countries. These companies pay taxes on the same income in more than one country. For example, Indian company X Limited operating in the USA has to pay tax in the USA on Income earned there and has to pay tax in India on its global income which includes income earned in the USA.

To provide relief from this double taxation Governments are entering in Double Taxation Avoidance Agreement. Income Tax Act also offers multiple reliefs to the Assessees.

Relief under section 90 and Section 91 of Income Tax Act, 1961

If a person who is resident in India in any previous year, in respect of his income, accrued or arose outside India has paid tax on such income in any country outside India, he shall be entitled deduction from the Income Tax payable by him of a sum calculated on such doubly taxed income:

Under section 90 if the country in which tax is paid has entered double taxation avoidance agreement with the Government of India.

Under section 91 if the country in which tax is paid has not entered into any agreement with the Government of India.

Calculation of Relief under section 90/91

Relief allowed under section 90/ 91 is lower of following accounts

1) Tax paid on double-taxed income outside India.

2) Tax payable on double-taxed income under Income Tax Act.

Procedural Requirements

Following documents is required to be furnished by the assessee

1. Statement of income from a country or specified territory outside India offered for the previous year and of foreign tax paid and deducted on such income in form 67 before the due date of filing of Income Tax Return.

2. A statement or certificate specifying the nature of income and amount of tax deducted or paid thereof:

  • form the tax authority of the country of specified territory outside India.
  • from the person responsible for such deduction
  • signed by the assessee

A signed statement by the Assessee is valid only if it is accompanied by the proof of deduction of tax or an acknowledgment of the online payment of tax.

Author Bio

Qualification: CA in Job / Business
Company: G.P. Agrawal & Co.
Location: Delhi, New Delhi, IN
Member Since: 09 Aug 2020 | Total Posts: 1

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6 Comments

  1. KANTILAL JAIN CA says:

    My client who is Indian was working in Sweden and returned to India in the year 2020 relevant to assessment year 2021-22.He paid taxes on salary earned in Sweden but he became resident but not ordinarry resident.He filed rerurn for A.Y.2021-22 by claiming rebate u/s 90 for taxes paid in Sweden but Included in Taxable Income of Return filed.Now my question is whether rebate is available u/s 90 as DTA is there with that country.I have mentioned article 2 of DTA in ITR.Please let me know whether rebate is properly claimed in ITR.Please reply.

  2. Akanksha Agrawal says:

    A person who is a resident in India, left for employment (to Germany) in the month of January and has earned Salary income in Germany.

    Now, as per the Para 2 of Article 15 of India-Germany DTAA, his income from Germany is not taxable in India. Does he still need to file Form 67? Please help, this is for ITR AY 2022-23. Request you to please guide.

  3. Kishor says:

    Assessee has earned dividend on ESOPs in US and tax deducted, now how can we claim relief u/s 90 for the financial year if we get form 1042 s for the calendar year, so it doesn’t match the income for the financial year. For filing form 67 it asks for proof what can we submit??

  4. Andy says:

    I was working in Sweden establishment of Indian company for more than 6 months in FY 2019-20. I was taxed on my income in Sweden. Do i still have to pay tax on that income in India ? Apart from tax on India income I have been told to pay tax on difference as the tax % in Sweden was 15% and in india I fall under 30%.

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