Amendment of section 90.
39. In section 90 of the Income-tax Act, after Explanation 3, the following Explanation shall be inserted with effect from the 1st day of April, 2018, namely:-
“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 any explanation given to it by the Central Government.”.
Notes on Clauses:
Clause 39 of the Bill seeks to amend section 90 of the Income-tax Act relating to agreement with foreign countries or specified territories.
The existing provisions of the said section confers power upon the Central Government to enter into an agreement with the Government of any country or specified territory outside India for granting of relief in respect of income on which income-tax has been paid both under the Income-tax Act and income-tax in that country or specified territory. It is further provided that any term used but not defined in this Act or in the agreement referred to in sub-section (1) of the said section shall have the meaning assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf, unless the context otherwise requires, provided the same is not inconsistent with the provisions of the Income-tax Act or the said agreement.
It is proposed to provide that where any term used in an agreement entered into under sub-section (1) of the said section 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 Income-tax Act, it shall have the same meaning as assigned to it in the said Act and any Explanation given to it by the Central Government.
This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.
