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

Under the Income-tax Act, 2025, where an agreement with a foreign country is notified for granting tax relief, how do the provisions of the Act apply to the assessee covered by it, subject to the overriding provisions of Chapter XI?

Where a notified agreement grants relief or avoids double taxation, the provisions of the Act apply to the assessee only to the extent they are more beneficial to that assessee. The Act is not wholly displaced, and Chapter XI applies regardless of benefit.

  1. AThe Act applies only to the extent it is less beneficial than the agreement
  2. BThe Act is wholly excluded for that assessee
  3. CThe Act applies to the extent it is more beneficial to that assesseeCorrect
  4. DThe Act applies only if the assessee is a resident of India

Explanation

The text states that in relation to the assessee to whom the agreement applies, the provisions of the Act apply to the extent they are more beneficial to the assessee. The Act is therefore not wholly excluded, and the less-beneficial option reverses the rule.

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