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

A term used in a notified DTAA is not defined in the agreement but is defined in the Income-tax Act, 2025. What meaning applies under section 159(7)?

The term takes the meaning assigned in the Income-tax Act, 2025, along with any explanation given by the Central Government. The agreement's own definition applies first, but where it is silent and the Act defines the term, the Act's meaning is used under section 159(7)(a).

  1. AThe meaning in the Act, together with any explanation given by the Central GovernmentCorrect
  2. BThe meaning in the ordinary dictionary only
  3. CThe meaning in the tax law of the other contracting country
  4. DThe meaning in the Companies Act, 2013

Explanation

Section 159(7)(a) states that if a term is defined in the agreement it takes that meaning, and if it is not defined there but is defined in the Act, it has the meaning in the Act and the explanation, if any, given by the Central Government. Foreign law and dictionaries are not the rule.

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