Section 90 of Income Tax Act "Agreement with foreign countries or specified territories"
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,
47[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 corresponding 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.
(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 notification issued by the
Central Government in the Official Gazette in this behalf.
(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 a
certificate 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.
(5) The assessee referred to in sub-section (4) shall also
provide such other documents and information, as may be
prescribed.
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
notified as such by the Central Government.
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.
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.