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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Tax Planning and Location of Business

A treaty between India and a foreign country is notified under the Income-tax Act, 2025. Which statement about a non-resident claiming treaty relief is correct under that Act?

The Act applies to the extent it is more beneficial than the treaty, while Chapter XI applies even if not beneficial. A non-resident must also obtain a residence certificate from the other country's government and give prescribed documents. Self-declaration is insufficient, and the treaty does not override Chapter XI.

  1. AThe treaty always overrides Chapter XI, even if the treaty is less beneficial
  2. BThe Act's provisions apply only where less beneficial than the treaty
  3. CRelief can be claimed on self-declaration of residence, with no certificate needed
  4. DThe Act's provisions apply to the extent more beneficial, but Chapter XI applies even if not beneficial, and a residence certificate from the other country's government is neededCorrect

Explanation

Section 159(4) applies the Act to the extent it is more beneficial to the assessee. Section 159(6) makes Chapter XI apply irrespective of benefit. Section 159(8) requires a residence certificate from the other government plus prescribed documents. Options A, B and C each contradict one of these.

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