In an increasingly globalised world, it is common for Indian residents to earn income from foreign sources—whether through employment abroad, investments, royalties, or business dealings. However, such cross-border income often attracts tax both in the foreign country and in India. To mitigate this burden of double taxation, the Income Tax Act, 1961, provides relief through Sections 90, 90A, and 91.
Understanding these provisions is essential for individuals and businesses to ensure they remain compliant while avoiding the adverse financial impact of being taxed twice on the same income. This blog explains these sections in detail, who they apply to, and how to claim the relief with step-by-step guidance and examples.
What is Double Taxation Relief?
Double taxation occurs when a taxpayer is liable to pay tax on the same income in two different countries. For instance, if you are a resident of India and earn salary income from the UK, both India and the UK may claim the right to tax that income, leading to economic double taxation.
To avoid this, India has established mechanisms through Sections 90, 90A, and 91, allowing Indian residents to claim tax relief depending on whether India has entered into a tax treaty (DTAA) with the foreign country or not.
Section 90: Bilateral Relief through Double Taxation Avoidance Agreement (DTAA)
What is Section 90?
Section 90 of the Income Tax Act offers bilateral relief—i.e., relief from double taxation through tax treaties known as Double Taxation Avoidance Agreements (DTAAs) between India and another country. These agreements are designed to specify how taxation will be handled for income that may be taxed in both jurisdictions.
Under DTAA, relief may be granted in two ways:
- Exemption Method: The foreign income is exempted from tax in India if it is already taxed in the foreign country.
- Credit Method: The tax paid in the foreign country is allowed as a credit against the Indian tax liability on the same income.
Eligibility:
- You must be a resident of India.
- The income must be taxed both in India and the foreign country.
- There must be a DTAA in place between India and the foreign country.
Example:
Suppose you are an Indian resident and earn ₹10 lakhs from a job in the UK and pay ₹2 lakhs as tax there.
- Indian tax on this income: ₹2.5 lakhs (hypothetical rate).
- Under Section 90: You can claim ₹2 lakhs (foreign tax paid) as a credit.
- Net tax payable in India: ₹2.5 lakhs (Indian tax) – ₹2 lakhs (foreign tax credit) = ₹50,000 to be paid in India.
Steps to claim relief:
- File Form 67 with your Indian tax return.
- Maintain and submit documentary proof of taxes paid abroad, such as tax payment challans, salary slips, or foreign tax returns.
- Report foreign income and claim relief in the ITR under the relevant schedule (Schedule FSI and TR).
Section 90A: Bilateral Relief (DTAA with Specified Associations)
What is Section 90A?
Section 90A is a special provision that allows for bilateral tax relief when India enters into a DTAA not with a country but with a specified association in that foreign country. These associations may include economic or trade blocs or specific entities recognised for treaty purposes.
While similar to Section 90, the difference is that Section 90A covers agreements with associations, not sovereign nations.
Example:
Suppose you are working for an Indian multinational that operates in a country through an association with a local entity, and India has a DTAA with that entity. You pay tax abroad, and that income is also taxed in India.
Under Section 90A, you can claim credit for the foreign tax paid, reducing your Indian tax liability accordingly.
Section 91: Unilateral Relief (No DTAA)
When no DTAA exists between India and the country where income is earned, Section 91 comes into play. This provision grants unilateral tax relief to Indian residents to avoid double taxation in the absence of a bilateral agreement.
The relief is in the form of a foreign tax credit, but is limited to the lower of:
- The tax payable in India on that foreign income, or
- The tax actually paid in the foreign country.
Who is Eligible?
- You must be a resident of India.
- The income must be taxed both in India and the foreign country.
- There must be no DTAA between India and the foreign country.
Steps to claim relief:
1.Include the foreign income while computing total income in your Indian ITR.
2.Report the foreign taxes paid under Schedule FSI.
3.File Form 67 and submit proof of tax payment in the foreign country.
4. Calculate the allowable credit as per the lower of foreign or Indian tax on the same income.
Summary Table
| Section | Applicability | Relief Type | Example Scenario |
| 90 | DTAA with a country | Exemption or Credit | UK job, tax paid in UK, credit claimed in India |
| 90A | DTAA with an association | Credit only | Indian company’s foreign subsidiary, tax paid abroad, credit claimed in India |
| 91 | No DTAA | Credit only | Income from a country with no DTAA, lower of foreign or Indian tax is credited |
Which ITR Form to Use and Due Dates for Filing
If you are a resident of India with foreign income or claiming foreign tax credit under Sections 90, 90A, or 91, you are generally required to file ITR-2.
- ITR-2 is applicable for individuals and HUFs not having income from business or profession, but who:
- Have foreign income,
- Hold foreign assets,
- Claim relief under DTAA,
- Or need to disclose income under Sections 90/90A/91.
If you have income from business or profession and also need to claim foreign tax credit, you will have to file ITR-3.
Due Date for Filing ITR
For the Assessment Year 2025–26, the original due date for filing ITR (for individuals who are not subject to tax audit) is:31st July 2025
Extended Due Date for AY 2025–26
As per CBDT Circular No. 06/2025, the due date has been extended to: 15th September 2025
Key Takeaways
Resident Status is Crucial
Only residents of India are eligible to claim relief under these provisions. Non-residents are taxed only on income accruing or arising in India and typically do not need relief for foreign income.
File Form 67 Before Filing Your ITR
Form 67 must be submitted online before filing your return. Failing to do so may result in denial of foreign tax credit, even if the tax was paid abroad.
Maintain Proof of Foreign Tax Payment
This may include salary slips, tax payment challans, certificates from employers or tax authorities, and foreign tax returns.
Final Words
The Indian Income Tax Act provides a robust framework to prevent double taxation through Sections 90, 90A, and 91. Whether you are a salaried individual working abroad, a business owner with foreign operations, or an investor receiving overseas income, these provisions ensure that you are not unfairly taxed on the same income twice.
However, to benefit from these provisions, timely and accurate compliance is key. Filing the correct forms, maintaining documents, and understanding which section applies to your situation are essential steps.
If you’re uncertain about how to claim your foreign tax credit or whether a DTAA applies to your income, it’s wise to consult a professional tax advisor.
