Section 91 Income Tax Relief: Countries Without a DTAA

What is unilateral double taxation relief?

Double taxation may arise when the same income is included in an Indian resident's taxable income and is also taxed by the country where it arises. India ordinarily addresses this through a double taxation avoidance agreement (DTAA). Where no applicable agreement exists, domestic law may provide unilateral relief without requiring a treaty.

Relief under Section 91 is a deduction from Indian income-tax payable, not a deduction from gross income. The relevant foreign income must meet the statutory conditions, including the requirement that it is not income deemed to accrue or arise in India.

Section 91 of the Income-tax Act, 1961: Explanation of provisions

Section 91(1): Relief for Indian residents

A person resident in India in the relevant previous year may claim relief on income accruing or arising outside India, which is not deemed to accrue or arise in India, where income-tax has actually been paid in a country with which there is no agreement under Section 90 for relief or avoidance of double taxation. The deduction is computed on the doubly taxed income using the lower of the Indian tax rate and the foreign country's tax rate. If the rates are equal, that rate applies.

Section 91(2): Special provision concerning Pakistan agricultural income

The 1961 Act separately provides relief for an Indian resident who paid tax in Pakistan under a law taxing agricultural income that is also taxable in India. The relief is the lesser of (a) the qualifying tax paid in Pakistan on that income and (b) the amount calculated at the Indian rate of tax. This historical special provision should not be confused with the general relief under subsection (1).

Section 91(3): Certain non-resident partners

The 1961 Act also provides relief in a specified situation where a non-resident is assessed on a share of income from a registered firm assessed as resident in India, and that share includes qualifying foreign income taxed in a country without a Section 90 agreement. The statutory conditions must be satisfied; the relief uses the lower applicable tax rate.

Section 160 of the Income-tax Act, 2025

Section 160(1) preserves the core unilateral-relief principle for an Indian resident in a relevant tax year where qualifying foreign income has been taxed in a country with no agreement under Section 159. Section 160(2) addresses the specified non-resident partner situation. The separate Pakistan agricultural-income provision formerly found in Section 91(2) is not reproduced as a corresponding subsection in Section 160.

Read the official Section 91 text and official Section 160 text for the precise statutory language.

Statutory definitions and method of calculation

The explanation to Section 91 of the 1961 Act defines key expressions used to calculate relief:

• Indian income-tax: Income-tax charged under the Income-tax Act.
• Indian rate of tax: Indian income-tax after deductions for relief available under the Act, but before relief under the relevant double-taxation chapter, divided by total income.
• Rate of tax of the foreign country: The relevant income-tax and super-tax actually paid there after ordinary relief but before foreign double-taxation relief, divided by the whole income assessed in that country.
• Income-tax in relation to another country: Includes certain excess profits or business profits taxes charged by its government or local authority, as provided in the statutory definition.

These definitions are important because the applicable rate may differ from a headline statutory slab or withholding rate. Consult the relevant definitions in Section 160 for a tax year governed by the 2025 Act.

Section 90, Section 90A and Section 91 compared

Under the 2025 Act, the corresponding agreement framework is found in Section 159 and unilateral relief in Section 160.

Example: Calculation of relief without a DTAA

Assume an Indian resident has qualifying foreign income of Rs. 4,00,000 that is taxable in both countries. The applicable Indian rate is 25% and the applicable foreign-country rate is 15%.

This simplified illustration assumes all the stated foreign income qualifies and the rates are computed in accordance with the applicable law. Actual credit may differ because of income classification, allocation, currency conversion, disputed taxes and other statutory restrictions.

How to claim relief and foreign tax credit

Taxpayers should first identify the governing tax year and applicable statute, establish Indian residence and foreign-source income, check whether an applicable DTAA exists, and reconcile the income and foreign tax paid with the Indian return.

1. Determine the Indian and foreign tax treatment of each income item and verify the absence of an applicable agreement.
2. Retain foreign tax returns, assessment records, withholding certificates and payment evidence.
3. Calculate the Indian and foreign tax rates and relief on the qualifying doubly taxed income.
4. Complete the relevant foreign-income and foreign-tax-credit schedules and prescribed declaration or form for the applicable tax year.
5. Follow the filing deadlines and documentary requirements under the rules applicable to that year.

For periods governed by the 1961 Act, Rule 128 of the Income-tax Rules, 1962 addresses foreign tax credit and Form 67 is the associated statement. For tax years under the 2025 Act, use the applicable Income-tax Rules, 2026 and corresponding notified forms rather than assuming older form numbers and deadlines continue unchanged.

Official guidance: DTAA and foreign tax credit and Income Tax e-Filing portal.

Frequently asked questions

Can relief be claimed when India has no DTAA with the other country?

Yes, subject to the requirements of Section 91 for periods governed by the 1961 Act or Section 160 for tax years governed by the 2025 Act.

Is foreign tax credit equal to the full foreign tax paid?

Not necessarily. Unilateral relief generally uses the lower of the applicable Indian and foreign tax rates on qualifying doubly taxed income, with other statutory limitations where applicable.

Does Section 91 apply to all non-residents?

No. Its principal rule concerns Indian residents; the separate subsection for certain non-resident partners applies only in the specified circumstances.

Which provision applies from 1 April 2026?

Section 160 of the Income-tax Act, 2025 governs the corresponding relief for tax years under the new Act, subject to its commencement and transitional provisions.

Official legal sources and further reading

• Income Tax Department: Section 91, Income-tax Act, 1961
• Income Tax Department: Section 160, Income-tax Act, 2025
• Official consolidated Income-tax Act, 2025, as amended by Finance Act, 2026 (PDF)
• Income Tax Department: Double taxation relief
• Income Tax Department: DTAA and foreign tax credit
• Ministry of Finance: Income-tax Act, 2025 commencement announcement

Last reviewed: 26 October 2026. This article is general legal information; assess the applicable law, rules and facts before filing a claim.