Amendment of section 90.
41. In section 90 of the Income-tax Act, in sub-section (1), in clause (b), after the words “as the case may be,”, the words and brackets “without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory),” shall be inserted with effect from the 1st day of April, 2021.
Notes on Clauses:
Clause 41 of the Bill seeks to amend section 90 of the Income-tax Act relating to agreement with foreign countries or specified territories.
Clause (b) of sub-section (1) of the said section provides that the Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be.
It is proposed to amend said clause so as to provide that the Central Government shall enter into said agreement for the avoidance of double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory).
This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years.
