What is Section 90 of the Income Tax Act?

One important point is that Section 90 and Section 91 are not the same.

Section 90 deals with situations where India has an agreement with the relevant foreign country. Section 91 provides relief in certain cases where there is no applicable agreement.

For Section 90 treaty benefits, the foreign-country tax residency requirement is important. The Income Tax Department's explanation of Section 90 states that a non-resident covered by an agreement cannot claim relief under that agreement without obtaining a certificate of residence from the foreign country and providing the prescribed documents and information.

So if someone is an NRI living in the UAE, USA, UK, Canada, or another country, I would first identify:

1. Where they are a tax resident.
2. Whether India has an applicable DTAA with that country.
3. What type of Indian income they have.
4. Which DTAA article covers that income.
5. What treaty conditions and documentation apply.

That is more reliable than simply saying, "I am an NRI, so Section 90 gives me a tax benefit."

I had a similar question when dealing with Indian bank interest.

One thing that helped me was separating Section 90, DTAA and TRC, because they are three different things.

Section 90 is part of Indian tax law. The DTAA is the actual agreement between India and the other country. The TRC is evidence of tax residence in the foreign country when treaty relief is being claimed.

Also, the DTAA doesn't necessarily mean that Indian tax becomes zero.

The treaty may give India the right to tax certain Indian-source income, sometimes subject to a maximum treaty rate. The exact treatment depends on the relevant article of that particular treaty.

For NRO interest, I would therefore check the India-country DTAA specifically rather than assuming that the same rate applies to every NRI.

I would also keep the TRC and other required documents ready if claiming treaty benefits.

As far as I understand it, Section 90 is the provision that allows India to enter into tax agreements with other countries. It is not itself a separate tax exemption for NRIs.

The agreements are generally called Double Taxation Avoidance Agreements (DTAAs). They are intended to provide relief from double taxation and can also cover matters such as exchange of tax information.

Section 90(2) is particularly relevant because where a DTAA applies, the provisions of the Income-tax Act can apply to the extent they are more beneficial to the taxpayer, subject to the conditions of the law and treaty.

So I would not read Section 90 as saying that all NRIs automatically pay a lower tax rate. The actual result depends on the particular DTAA, type of income, and the taxpayer's circumstances.

For example, the treaty article dealing with interest income may have specific provisions that need to be checked before applying a treaty rate.

The Income Tax Department also states that a non-resident claiming relief under an applicable agreement needs a certificate of residence from the foreign country and prescribed information/documents.

One thing that confused me initially was the difference between Section 90 and Section 91.

Section 90 is generally associated with relief where India has entered into a tax treaty with another country. Section 91 deals with unilateral relief in certain situations where there isn't an applicable DTAA.

So if you're an NRI in the US, you would normally first check whether the India-US DTAA applies to your particular income before looking at the relief mechanism.

Also, don't assume that all income is treated the same way. Interest, dividends, salary, capital gains, pensions, and other types of income can have different treaty provisions.

The TRC/Form 10F question is also worth checking separately because documentation requirements can depend on the type of DTAA benefit being claimed and the taxpayer's circumstances.

For anything involving a substantial amount of tax, I'd verify the current Income Tax Department guidance or speak with a qualified tax professional rather than relying solely on a forum answer.

I think the easiest way to understand Section 90 is that it provides the framework for India to give effect to certain tax treaties with other countries.

The actual DTAA is what you need to read for your particular situation. For example, the India-US treaty has provisions dealing with different categories of income, and those provisions can determine whether India, the US, or both countries can tax particular income.

There can also be a difference between exemption and foreign tax credit methods of relief. So saying “I already paid tax abroad” isn't enough by itself to determine what happens in India.

I haven't personally dealt with every type of foreign income, but for my Indian return I kept my foreign tax documents and checked the applicable treaty provisions.

If you're using Section 90 for an India-US situation, I'd also check whether you need a Tax Residency Certificate (TRC) and whether Form 10F or other documentation is applicable to your particular claim.

Tax rules can change, so I'd verify the current requirements for the relevant assessment year rather than relying on an older tax article.