Skip to content

CA Final · Direct Tax Laws & International Taxation · Tax Planning, Tax Avoidance and Tax Evasion

Zenith Overseas Ltd, a foreign company not resident in India, wants to claim relief under a notified agreement with its home country. As per section 159 of the Income-tax Act, 2025, which condition must the non-resident assessee satisfy to claim the relief?

A non-resident assessee can claim treaty relief only if it obtains a certificate of residence from the Government of the foreign country or specified territory and also provides the other documents and information that are prescribed. A mere self-declaration of residence is not enough.

  1. AObtain a certificate of residence from the Government of that country or specified territory, and furnish such other prescribed documents and informationCorrect
  2. BMerely declare its residence in its return of income
  3. CObtain a certificate from the Indian Assessing Officer confirming its foreign residence
  4. DShow that the foreign tax rate on the company is higher than the rate on a domestic company

Explanation

Section 159(8) permits a non-resident to claim relief under an agreement only when a residency certificate is obtained from the Government of that country or specified territory and prescribed documents and information are provided. Self-declaration is insufficient. A higher rate on a foreign company is not treated as less favourable under section 159(5), so it is not a condition.

Did you get it right without looking?

One question tells you little. A timed set on Tax Planning, Tax Avoidance and Tax Evasion shows your real accuracy, how long you take and where you lose marks.

Practise Tax Planning, Tax Avoidance and Tax EvasionFree diagnostic mock

More Tax Planning, Tax Avoidance and Tax Evasion questions