Income-tax Act,1961
Act No : 43
Section :
Agreement with foreign countries2
1[90. Agreement with foreign countries2 3[(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 income on which have been paid both income-tax under this Act and income-tax in that country, 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.] 4[(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.] ---------------------------------------------------------------------- 1 Substituted by the Finance Act, 1972, w.e.f. 1-4-1972. 3 Renumbered by the Finance (No. 2) Act, 1991, w.r.e.f. 1-4-1972. 4 Inserted, ibid. --------------------------------------------------------------------- 1.447 No. 6387 and exchange of notes dated 28-6-1984, mutual agreement has been reached for application of this agreement with effect from 1-1- 1991, in the territory of five new States as well as part of the Land Berlin where Basic Law was not valid before the coming into force of the German merger. The existing agreement between India and the German Democratic Republic for the avoidance of double taxation with respect to taxes on income and on capital dated 2-3-1990 will be applied only until 31-12-1990. 3. A reduced tax rate of 20 per cent has been prescribed in respect of royalties and fees for technical services paid by a resident of India to a resident of Canada. The reduced rate will be applicable to payments made in respect of the right or property which is first granted or under a contract which is signed after 12th December, 1988. 4. Where a specific provision is made in the Double taxation avoidance agreement, that provision will prevail over the general provisions contained in the Income-tax Act. Where such Agreement provided for a particular mode of computation of income the same should be followed irrespective of the provisions of the Act.
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