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CMA Final · Direct Tax Laws and International Taxation · Double Taxation Avoidance Agreements (DTAA)

Which of the following is a purpose for which the Central Government may enter into an agreement under section 159 of the Income-tax Act, 2025?

Exchange of information for prevention of evasion or avoidance of income-tax, or for investigating such cases, is a listed purpose under section 159(3)(c). Fixing GST rates, granting residency or waiving returns are not purposes of such agreements.

  1. AFixing the rate of GST on cross-border services
  2. BExchange of information for prevention of evasion or avoidance of income-taxCorrect
  3. CGranting of residency status to foreign companies by agreement
  4. DWaiving the obligation to file a return of income in India

Explanation

Section 159(3)(c) lists exchange of information for preventing evasion or avoidance of income-tax or investigating such cases as a purpose of agreements. The others, such as GST rates, residency grants or return waivers, are not listed purposes.

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