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

An agreement between a specified association in India and a specified association in a specified territory has been entered into. Under section 159(4) of the Income-tax Act, 2025, what condition must be met before the Act's provisions apply to the assessee only to the extent more beneficial?

The agreement must have been notified under section 159(2). Only then, for granting relief or avoiding double taxation, do the Act's provisions apply to the assessee to the extent they are more beneficial. No minimum duration or company status is required.

  1. AThe agreement must be signed by the Prime Minister
  2. BThe agreement must be notified under section 159(2)Correct
  3. CThe agreement must have been in force for at least five years
  4. DThe assessee must be a company incorporated in the specified territory

Explanation

Section 159(4)(b) applies where a specified association in India has entered into an agreement with a specified association of a specified territory and such agreement has been notified under sub-section (2). Without notification, the benefit rule does not operate. No minimum duration or company status is required.

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