CA Final · Direct Tax Laws & International Taxation · Double Taxation Relief
An India–Country Y tax agreement uses the term 'enterprise' but does not define it. The Income-tax Act, 2025 defines the term. Under section 159(7)(a), how is the term to be interpreted?
Since the agreement does not define the term but the Act does, the term takes the meaning assigned in the Income-tax Act, 2025, along with any explanation given by the Central Government. Other laws are consulted only if the agreement, the Act and any notification all leave the term undefined.
- AIt has the meaning given in the Act, along with any explanation given by the Central GovernmentCorrect
- BIt has the meaning given in Country Y's domestic law
- CIt has the meaning in any other law of the Central Government, ignoring the Act's definition
- DThe term is invalid and the treaty relief cannot be claimed
Explanation
Section 159(7)(a) provides that a term defined in the agreement has the agreement's meaning. Where the agreement does not define it but the Act does, the term has the meaning given in the Act, together with any explanation by the Central Government. Option C reverses the order, since other laws apply only when neither the agreement, the Act nor a notification defines the term.
Did you get it right without looking?
One question tells you little. A timed set on Double Taxation Relief shows your real accuracy, how long you take and where you lose marks.
More Double Taxation Relief questions
- India has an agreement with Country Y under which the agreed tax on a certain royalty is 20%, while the domestic provisions of the Income-ta…
- Arvind Textiles Ltd, an Indian resident company, needs a certificate of residence to claim treaty benefits abroad. Under Rule 75, what is th…
- An Indian treaty with a country gives a lower tax rate on a particular income than the Income-tax Act, 2025. In another instance the Act's o…
- Under the India–X treaty, a foreign company is charged to tax in India at 40% on its India-source business income, whereas domestic companie…
- A foreign company, resident in a treaty country, is taxed in India at a rate higher than that for a domestic company. The treaty has a non-d…
- An agreement notified under section 159 does not define the term 'royalty', but the Income-tax Act, 2025 defines it and the Central Governme…