Section 90 of Income Tax Act 1961: DTAA Relief and Current Section 159

Section 90 of the Income-tax Act, 1961 was the principal enabling provision for India's agreements with foreign countries or specified territories for double taxation relief, exchange of tax information and recovery of tax. From 1 April 2026, the Income-tax Act, 2025 is in force and the corresponding subject is contained in Section 159.

Updated for the law in force as on 28 September 2026.

What does the double taxation agreement provision mean?

India may enter into a Double Taxation Avoidance Agreement, commonly called a DTAA, with another country or specified territory. A DTAA allocates taxing rights and may provide relief where the same income is taxable in more than one jurisdiction. The statutory framework also supports exchange of information, investigation of tax evasion or avoidance, and recovery of income-tax.

The provision is therefore wider than a simple exemption from double tax. Its operation depends on the text of the applicable treaty, the domestic income-tax law, notifications, prescribed documentation and the facts of the taxpayer's case.

Former Section 90 of the Income-tax Act, 1961

Under the 1961 Act, Section 90 authorised the Central Government to enter into agreements with governments outside India or specified territories for specified international tax purposes. In practical terms, the section covered:

• relief where income was taxed in India and in the other country or territory;
• avoidance of double taxation and promotion of mutual economic relations, trade and investment;
• prevention of non-taxation or reduced taxation through tax evasion, avoidance or treaty-shopping arrangements;
• exchange of information for prevention or investigation of tax evasion or avoidance; and
• recovery of income-tax.

Former Section 90(2) contained the important taxpayer-benefit rule: where a notified agreement applied, the provisions of the 1961 Act applied only to the extent they were more beneficial to the assessee. Former Section 90(2A), however, preserved the application of the General Anti-Avoidance Rules in Chapter X-A even where those provisions were not beneficial.

Current law: Section 159 of the Income-tax Act, 2025

Section 159 is now the central provision dealing with agreements with foreign countries or specified territories and the adoption of agreements between specified associations for double taxation relief. It combines subject matter that was separately dealt with in Sections 90 and 90A of the 1961 Act.

Section 159 permits agreements for relief from double taxation, avoidance of double taxation, exchange of information and recovery of tax. It also continues the principle that, for an assessee covered by an applicable agreement, the provisions of the Act apply to the extent they are more beneficial, subject to the statutory anti-avoidance rule.

Main features of Section 159

• Government agreements: the Central Government may enter into an agreement with another country or a specified territory.
• Specified association agreements: qualifying associations may enter into agreements that can be adopted and implemented by Central Government notification.
• Purpose: tax relief, avoidance of double taxation, information exchange, investigation and tax recovery.
• Beneficial treatment: the Act applies to the extent it is more beneficial to the assessee where the relevant agreement applies.
• Anti-avoidance: the anti-avoidance chapter applies even where it is not beneficial to the assessee.
• Residence evidence: a non-resident claiming treaty relief must satisfy the prescribed residence-certificate and information requirements.

Which applies when the Act and DTAA differ?

The basic rule is taxpayer-specific. Where a valid agreement applies, the domestic Act operates to the extent it is more beneficial to the assessee. This does not mean that a taxpayer may automatically select isolated words from different regimes. The relevant treaty article, domestic provision, eligibility conditions, anti-abuse provisions, notifications and supporting documentation must be considered together.

Tax Residency Certificate and Form 41 for non-residents

Under the current 2025 Act framework, a non-resident seeking relief under an agreement must obtain a Tax Residency Certificate (TRC) from the government or tax authority of the country or specified territory of residence and provide the prescribed documents and information.

Under the Income-tax Rules, 2026, Rule 75 deals with the relevant documentation. Form No. 41, which replaces the earlier Form 10F for this purpose, is the prescribed self-declaration used by a non-resident taxpayer claiming DTAA benefits. The Income Tax Department states that Form 41 is filed electronically and may be filed by eligible non-residents even where PAN is not available, subject to the applicable portal and form requirements.

Specified territory and interpretation of treaty terms

A specified territory is an area outside India that may be notified by the Central Government for the purposes of the provision. Section 159 also contains rules for interpreting terms used in an agreement. Where a term is defined in the agreement, the treaty definition applies. Where it is not defined there, the Act, notified meanings and other applicable Central laws may become relevant in the sequence provided by the section.

Section 90 of 1961 Act and Section 159 of 2025 Act

Related provisions

For the older 1961 Act framework, see Section 90A: agreements between specified associations and Section 91: relief where no agreement exists. These links are retained because they remain useful for historical and transitional research.

Official Income Tax Department resources

Important note

This article is a general legal and tax information resource. Treaty entitlement can depend on residence, beneficial ownership, limitation or anti-abuse provisions, the nature of income, permanent establishment issues, notifications and the text of the particular DTAA. For a transaction or assessment, read the applicable treaty and current statutory provisions together.