Section 159
Section 159: double taxation avoidance agreements
Section 159 is the provision most tax professionals still call "90/90A" - it lets the Central Government sign double taxation avoidance agreements (DTAAs) with other countries, and separately lets specified associations in India sign and have notified agreements with counterpart associations abroad. Either way, where a notified agreement applies, the assessee gets whichever treatment - the Act's or the agreement's - is more beneficial, subject to specific carve-outs.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Two routes for an agreement
The Central Government may enter into an agreement with the Government of any other country or any specified territory for the purposes described below, and may notify provisions necessary to implement it.
Separately, any specified association in India may enter into an agreement with a specified association in a specified territory for the same purposes, and the Central Government may notify provisions to adopt and implement that agreement.
What the agreement can cover
An agreement under either route may be entered into for:
- Granting relief in respect of income on which tax has been paid both under this Act and under the corresponding law of the other country/territory, and relief in respect of income-tax chargeable under both, to promote mutual economic relations, trade and investment
- Avoidance of double taxation of income under this Act and the corresponding foreign law, without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance - including treaty-shopping arrangements aimed at indirectly benefiting residents of a third country or territory
- Exchange of information for preventing evasion or avoidance of tax, or investigating such evasion or avoidance
- Recovery of income-tax under this Act and the corresponding foreign law
Which treatment applies - Act or agreement
Where a Central Government agreement or a notified specified-association agreement applies to an assessee, the provisions of this Act apply to that assessee only to the extent they are more beneficial than the agreement.
A higher rate of tax charged on a foreign company (compared to a domestic company), or on a company incorporated in the specified territory (compared to a domestic company), is not treated as a less favourable charge for this purpose.
Irrespective of the "more beneficial" rule above, the provisions of Chapter XI apply to the assessee even where they are not beneficial to the assessee.
How terms in the agreement are interpreted
A term defined in the agreement has the meaning given there. A term not defined in the agreement but defined in this Act has the meaning given in this Act (and any Central Government explanation of it). A term used but not defined in either the Act or the agreement takes the meaning assigned by Central Government notification, effective from the date the agreement came into force; failing that, the meaning under any Central Government tax law, or otherwise any other Central Government law.
Claiming relief as a non-resident
A non-resident assessee can claim relief under such an agreement only if they obtain a tax residency certificate from the Government of the relevant country or specified territory, and provide such other documents and information as may be prescribed.
Key definitions
| Term | Meaning |
|---|---|
| Specified association | Any institution, association or body, incorporated or not, functioning under Indian law or the laws of the specified territory, and notified as such by the Central Government for the purposes of this section |
| Specified territory | Any area outside India notified as such by the Central Government |
Frequently asked questions
Is Section 159 the same as what people call "DTAA" or "90/90A"?
Yes - Section 159 is the Income-tax Act, 2025's provision for double taxation avoidance agreements between the Central Government and other countries/territories, and for adopted agreements between specified associations, corresponding to sections 90 and 90A of the Income-tax Act, 1961.
If a DTAA and the Income-tax Act, 2025 give different treatment, which applies?
The provisions of this Act apply only to the extent they are more beneficial to the assessee than the agreement - otherwise the agreement's treatment applies.
What must a non-resident do to claim treaty relief?
Obtain a certificate of tax residency from the government of the relevant country or specified territory, and furnish such other documents and information as prescribed.
Does the "more beneficial" rule override every part of the Act?
No - Chapter XI provisions apply to the assessee regardless of the agreement, even where they are not beneficial to the assessee.
Related sections
Want this applied to your actual filing, not just explained?
Talk to our team about claiming DTAA reliefLast updated 9 September 2026