Section 98, 99, 101, 102 of Income Tax Act Section 98 of Income Tax Act Consequences of Impermissible Avoidance Arrangement Section 98 prescribes that if an arrangement is declared as an impermissible avoidance arrangement (“IAA”) there would be denial of the tax benefit or denial of the tax treaty benefit. Section 90(2A) of the Act … Read more

Section 96 of Income Tax Act – Meaning of impermissible avoidance arrangement. An arrangement is an impermissible avoidance arrangement, if its main purpose , of the arrangement, or step in an arrangement, is to obtain a tax benefit (“Main Purpose Test”) and it satisfies one or more of the conditions : Arrangement creates rights or … Read more

Section 97 of Income Tax Act – Circumstances in which arrangement would lack commercial substance Section 97 of Income Tax Act provides that an arrangement shall be deemed to lack commercial substance, if — Substance or effect of the arrangement as a whole, is inconsistent with, or differs significantly from, the form of its individual … Read more

Section 95 of Income Tax Act – Power of tax authority to declare an arrangement as an impermissible avoidable arrangement Section 95 of the IT Act, 1961, empowers the tax authority, to declare an arrangement as an impermissible avoidable arrangement. Tax authority has also power to declare a step in, or a part of, the … Read more

Different Types and Methods of Double taxation avoidance agreements (DTAA) International double taxation has adverse effects on the international trade and services. Taxing the same income twice by a two or more countries would disincentivise international taxation. The domestic laws of most countries mitigate the double taxation by providing unilateral relief.  But since, there is … Read more

Double Taxation Avoidance Agreements Examples India, under section 90 of the Income tax act 1961 is empowered to enter into Double taxation avoidance agreements. The country has established one of the largest networks of DTAA with over 90 countries. Double Taxation Avoidance Agreements Examples Some of the examples of such DTAA’s are as follows – … Read more

List of Countries having Double Taxation Treaty with India In order to promote international trade, and attract foreign investment in India, India has entered into DTAA with the following countries : – These DTAA are basically, based on the UN model tax convention, while appropriate changes have been agreed between India and respective countries, to … Read more

Tax Residence Certificate (TRC) A tax residence certificate is required to claim the benefit of a Double Taxation Avoidance Agreement (DTAA”) entered into between India and a foreign country.  Tax residency certificate can be required in respect of two situations (a) A non-resident deriving income from India (b) An Indian resident deriving overseas income . … Read more

DTAA between India and USA The Double Taxation Avoidance Agreement DTAA between India and USA has been entered for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income . This DTAA between India and USA shall apply to persons who are residents of one or both of … Read more