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CS Professional · Advanced Direct Tax Laws and Practice · Double Taxation Avoidance Agreement (DTAA)

A term appears in an India treaty but is defined neither in the treaty nor in the Income-tax Act, 2025, nor in any notification issued under the treaty-interpretation provision. Under section 159 of the Act, which meaning is to be adopted, unless the context otherwise requires?

The undefined term takes its meaning from a Central Government tax Act, and where none applies, from any other Central Government law. The meaning operates from the date the agreement came into force. The statute does not name OECD commentary or the taxpayer's preference as the fallback.

  1. AThe meaning assigned in any Central Government Act related to taxes, and in other cases in any other Central Government lawCorrect
  2. BThe meaning given in the other treaty partner's domestic law only
  3. CThe meaning that the taxpayer claims is more beneficial
  4. DThe meaning in the latest OECD Model Convention commentary

Explanation

Section 159(7)(c) provides that an undefined term takes the meaning in any Central Government Act related to taxes, and otherwise in any other Central Government law, effective from the date the agreement came into force. The other options are not the statutory fallback.

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