CA Final · Direct Tax Laws & International Taxation · Double Taxation Relief
Meridian Holdings Ltd, a company incorporated in a country with which India has a notified double taxation agreement, earns royalty income from Indian customers during the tax year and wants to claim relief under that agreement. It holds a certificate from its home-country government stating that it is a resident there. Under section 159 of the Income-tax Act, 2025, what else must it do to be entitled to claim the treaty relief?
The company must also furnish the other prescribed documents and information in Form No. 41 under Rule 75. Section 159(8) makes both the foreign residence certificate and the prescribed information conditions for a non-resident to claim treaty relief, so the certificate alone is not enough.
- AFile an application in Form No. 42 with the Assessing Officer
- BObtain a certificate of residence from the Indian Assessing Officer in Form No. 43
- CProvide the other prescribed documents and information, being Form No. 41 under Rule 75Correct
- DNothing further, because the residence certificate alone is enough
Explanation
Section 159(8) requires a non-resident assessee to hold a residence certificate from the government of its country AND to provide such other documents and information as prescribed. Rule 75(1) prescribes Form No. 41. Forms 42 and 43 apply to residents of India seeking a certificate, so option A is wrong for a foreign company.
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