💰 Tax Savings · Special-status benefits
DTAA & foreign tax credit — don't pay tax twice (Sections 159 & 160)
✍️ EaseValue Advisors · Updated 17 Jul 2026 · FY 2025-26
In short
If the same income is taxed in two countries, a DTAA (Section 159, old 90) — or unilateral relief (Section 160, old 91) where there's no treaty — lets you credit the foreign tax against your Indian tax, so you don't pay twice.
How relief works
- DTAA (Section 159, old 90): India has treaties with 90+ countries. The treaty either exempts the income in one country or gives a tax credit in the other, and often caps TDS rates on interest, dividends and royalties.
- Unilateral relief (Section 160, old 91): no treaty? India still lets a resident credit the foreign tax paid, at the lower of the two rates.
What you need to claim it
- A Tax Residency Certificate (TRC) from the other country, plus Form 10F.
- Form 67 filed before your return to claim the Foreign Tax Credit (old Rule 128).
- Proof of foreign tax paid.
Who it helps
- NRIs — use the TRC to get treaty TDS rates on Indian income (often lower than domestic), alongside a lower-TDS certificate.
- Residents with foreign income — salary, dividends or capital gains taxed abroad get credited here.
The law behind it
Section 159 (old 90) Section 160 (old 91) Form 67 / old Rule 128
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
EaseValue