Income Tax Act, 1961
Section 5: Ins. by Act 23 of 2012, s. 33 (w.e.f. 12006).
5. Ins. by Act 23 of 2012, s. 33 (w.e.f. 12006).
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1[Explanation 4.—For the removal of doubts, it is hereby declared that where any term used in an
agreement entered into under sub-section (1) is defined under the said agreement, the said term shall have
the same meaning as assigned to it in the agreement; and where the term is not defined in the said
agreement, but defined in the Act, it shall have the same meaning as assigned to it in the Act and
explanation, if any, given to it by the Central Government.]
91. Countries with which no agreement exists.—(1) If any person who is resident in India in any
previous year proves that, in respect of his income which accrued or arose during that previous year
outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which
there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by
deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from
the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate
of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the
rates are equal.
(2) If any person who is resident in India in any previous year proves that in respect of his income
which accrued or arose to him during that previous year in Pakistan he has paid in that country, by
deduction or otherwise, tax payable to the Government under any law for the time being in force in that
country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian
income-tax payable by him—
(a) of the amount of the tax paid in Pakistan under any law aforesaid on such income which is
liable to tax under this Act also; or
(b) of a sum calculated on that income at the Indian rate of tax;
whichever is less.
(3) If any non-resident person is assessed on his share in the income of a registered firm assessed as
resident in India in any previous year and such share includes any income accruing or arising outside
India during that previous year (and which is not deemed to accrue or arise in India) in a country with
which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves
that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of
the income so included he shall be entitled to a deduction from the Indian income-tax payable by him of a
sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the
said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Explanation.—In this section,—
(i) the expression “Indian income-tax” means income-tax 2*** charged in accordance with the
provisions of this Act;
(ii) the expression “Indian rate of tax” means the rate determined by dividing the amount of
Indian income-tax after deduction of any relief due under the provisions of this Act but before
deduction of 3[any relief due under this Chapter], by the total income;
(iii) the expression “rate of tax of the said country” means income-tax and super-tax actually paid
in the said country in accordance with the corresponding laws in force in the said country after
deduction of all relief due, but before deduction of any relief due in the said country in respect of
double taxation, divided by the whole amount of the income as assessed in the said country;
is defined under the said agreement, the said term shall have
the same meaning as assigned to it in the agreement; and where the term is not defined in the said
agreement, but defined in the Act, it shall have the same meaning as assigned to it in the Act and
explanation, if any, given to it by the Central Government.]
91. Countries with which no agreement exists.—
If any person who is resident in India in any
previous year proves that, in respect of his income which accrued or arose during that previous year
outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which
there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by
deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from
the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate
of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the
rates are equal.
If any person who is resident in India in any previous year proves that in respect of his income
which accrued or arose to him during that previous year in Pakistan he has paid in that country, by
deduction or otherwise, tax payable to the Government under any law for the time being in force in that
country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian
income-tax payable by him—
of the amount of the tax paid in Pakistan under any law aforesaid on such income which is
liable to tax under this Act also; or
of a sum calculated on that income at the Indian rate of tax;
whichever is less.
If any non-resident person is assessed on his share in the income of a registered firm assessed as
resident in India in any previous year and such share includes any income accruing or arising outside
India during that previous year (and which is not deemed to accrue or arise in India) in a country with
which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves
that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of
the income so included he shall be entitled to a deduction from the Indian income-tax payable by him of a
sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the
said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Explanation.—In this section,—
the expression “Indian income-tax” means income-tax 2*** charged in accordance with the
provisions of this Act;
the expression “Indian rate of tax” means the rate determined by dividing the amount of
Indian income-tax after deduction of any relief due under the provisions of this Act but before
deduction of 3[any relief due under this Chapter], by the total income;
the expression “rate of tax of the said country” means income-tax and super-tax actually paid
in the said country in accordance with the corresponding laws in force in the said country after
deduction of all relief due, but before deduction of any relief due in the said country in respect of
double taxation, divided by the whole amount of the income as assessed in the said country;