Section-specific penalty + s. 270A/271C/271CA framework.
16. Prosecution exposure
Section 276 series — wilful evasion.
17. Cross-statute interplay
PMLA / FEMA / DTAA / Companies Act / GST.
18. Repeal & saving — 1961 → 2025
Section 536 saves pending proceedings.
HISTORICAL CONTEXT
Section 91 provides for unilateral foreign-tax relief — applicable where no DTAA exists with the foreign country. The provision recognises India's policy commitment to alleviate double taxation even in the absence of bilateral treaty arrangements. The relief is at the LOWER of Indian rate or foreign rate — India operates as a residence-jurisdiction with credit ceiling.
The procedural framework is provided through Rule 128 (Foreign Tax Credit Rules, 2017) and Form 67 (FTC claim form). The Tribunal has consistently held that late Form 67 filing is a procedural lapse not going to the root of substantive entitlement — substantial-compliance ratio (Trishna Industries / Ekta Diamonds).
Section 91 differs from section 90 in three key respects: (i) section 91 applies only to non-DTAA countries; (ii) section 91 is unilateral (no reciprocity); (iii) section 91 relief is at the lower of Indian or foreign rate (whereas s. 90 follows treaty rules). With India's extensive DTAA network (~95 countries), section 91's application has narrowed but remains relevant for source-jurisdictions not in India's treaty network.
The transition to the Income-tax Act, 2025 preserves the substantive framework; pending proceedings continue under section 536 saving.
Facts. The Department sought to apply a surcharge provision retrospectively to block-period assessments. The assessee contended that the amendment was substantive and could not have retrospective operation absent express legislative direction.
Issue. Whether amendments to taxing statutes operate prospectively unless the legislature has expressly or by necessary implication conferred retrospective effect.
HELD. The Constitution Bench reaffirmed the general rule against retrospectivity of taxing statutes. A taxing provision must be construed prospectively unless the language compels otherwise; mere insertion or substitution by amendment is not sufficient to deny vested rights.
“Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation.”
Relevance. Anchor authority for any argument that an amendment to a charging or computational provision must apply only from the AY notified — useful in transitional disputes around FA 2025 and the 1961 → 2025 changeover.
▸ Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667 ; (2000) 1 SCR 1 (Supreme Court)
Facts. A municipal levy was challenged on the ground that the charging provision did not clearly specify the rate, the persons charged, and the measure of tax.
Issue. Whether a tax can be imposed in the absence of a clear, unambiguous charging provision identifying the subject, measure, rate, and incidence.
HELD. Article 265 demands that tax be levied only by clear authority of law. The four components — taxable event, person, rate, and measure — must be clearly discernible from the charging provision; ambiguity is fatal to the levy.
“The intention of the Legislature in a taxation statute is to be gathered from the language of the provisions, particularly when the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose other than what is given expression to.”
Relevance. Foundational authority on the rigour required of charging sections — underpins arguments that ambiguous deeming fictions, surcharge formulas, and rate prescriptions must be strictly construed.
▸ Union of India v. Azadi Bachao Andolan (2003) 263 ITR 706 ; (2004) 10 SCC 1 (Supreme Court)
Facts. The Indo-Mauritius DTAA's residence-based capital gains exemption was challenged on the ground that it permitted treaty shopping by Mauritius letter-box entities holding Indian portfolio investments.
Issue. Whether CBDT Circular No. 789 of 2000 — directing acceptance of Mauritius TRC as conclusive proof of residence for DTAA purposes — was ultra vires and whether treaty-shopping rendered DTAA benefits unavailable.
HELD. The Court held the Circular intra vires and binding on Revenue. Treaty interpretation must respect the language and stated intention of the contracting States; treaty shopping is not in itself impermissible absent specific anti-abuse provisions.
“The principles adopted for interpretation of treaties are not the same as those in interpretation of statutory legislation. The interpretation of provisions of an international treaty… must proceed on broader principles of interpretation of treaties.”
Relevance. Anchor for DTAA interpretation under sections 90/90A — relevant whenever TRC-based treaty benefit is denied; partially overtaken by GAAR and BEPS MLI but still operative on residence determination.
Facts. Section 52(2) (since deleted) deemed sale consideration to be FMV where FMV exceeded the declared consideration by 15%. The Department applied it on a literal reading even when the assessee had not in fact received more than the declared price.
Issue. Whether a deeming provision in a charging schema can be construed literally where its plain reading produces a result manifestly contrary to legislative object.
HELD. The Court read down section 52(2) to apply only where the assessee had actually received consideration in excess of the declared sum. A literal construction yielding absurd or unjust results must yield to an object-based interpretation; the CBDT's contemporaneous Circular No. 96 was held binding on the Revenue.
“It is well settled that a literal construction of a statutory provision ought not to be adopted if it produces a manifestly unjust result… Where a literal construction creates an anomaly, the courts will adopt that construction which avoids the anomaly.”
Relevance. Anchor authority for purposive construction of deeming fictions across the 1961 Act — applies wherever a deeming clause (e.g., s. 50C, s. 56(2)(x), s. 2(22)(e)) yields a result contrary to legislative purpose.
▸ Commissioner of Income-tax v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 ; (2010) 11 SCC 762 (Supreme Court)
Facts. The assessee claimed deduction of interest on borrowings used for investment in shares yielding tax-free dividend. The deduction was disallowed under section 14A. The Department levied penalty under section 271(1)(c) for concealment / inaccurate particulars.
Issue. Whether a mere disallowance of a deduction — without any falsehood in the particulars furnished — attracts penalty under section 271(1)(c).
HELD. Penalty under section 271(1)(c) is not attracted merely because a claim for deduction is disallowed. The assessee's claim must be shown to be false, frivolous, or made without bona fides; mere unsustainability does not amount to concealment or furnishing of inaccurate particulars.
“A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to inaccurate particulars.”
Relevance. Cornerstone authority for resisting penalty under section 271(1)(c) / section 270A — applies to disallowed deductions, transfer-pricing adjustments, head-of-income re-characterisations where a bona-fide claim was made.
CBDT CIRCULARS — ECOSYSTEM
▸ CBDT Circular No. 14(XL-35) of 1955 dated 11 April 1955
Subject. Duty of officers to assist assessees in claiming and securing relief
Substance. Foundational circular directing that the AO should not exploit assessee ignorance to deny legitimate reliefs; officer is required to draw attention to refunds or reliefs to which the assessee is entitled. The circular has been judicially noted in several appellate decisions and remains operative for first-appellate practice.
Substance. Explained the FA 1987 / FA 1989 amendments unifying the previous year with the financial year preceding the AY, including transitional provisions for assessees with different accounting years. Useful in any controversy on the timing of accrual / chargeability for early post-1989 AYs.
▸ CBDT Circular No. 5 of 2014 dated 11 February 2014
Subject. Section 14A — dis-allowance even where no exempt income earned (since modulated)
Substance. Initially directed AOs to apply Rule 8D disallowance under section 14A even where no exempt income was earned in the year; subsequently modulated by Cheminvest (Del HC) and Maxopp (SC). FA 2022 amendment to section 14A re-asserted the position but remains under litigation.
▸ CBDT Circular No. 6 of 2019 dated 20 March 2019
Subject. Withdrawal of low-tax-effect appeals — monetary thresholds
Substance. Revised monetary thresholds for departmental appeals — ITAT (Rs 50L), HC (Rs 1 Cr), SC (Rs 2 Cr); subsequently further revised. Operates as a non-statutory limitation on the Revenue's appellate engagement, binding under section 119.
Substance. Procedural guidance for AOs handling transitional reassessment notices for AYs 2013-14 to 2017-18 affected by Ashish Agarwal and Rajeev Bansal. Sets out the form of section 148A inquiry, time-bar calculation under TOLA, and JAO/FAO jurisdiction in faceless cases.
WORKED EXAMPLES
Illustration — Illustration 1
Facts. Resident A earned business income Rs 10 L in Country X (no DTAA); paid 25% tax there.
Computation.
Section 91 — lower of Indian rate (30%) or foreign rate (25%) = 25%.
FTC = Rs 2.5 L.
Indian tax = Rs 3 L; net Rs 50K payable in India.
Form 67 filed.
Result. FTC Rs 2.5 L under s. 91; net Rs 50K India tax.
Illustration — Illustration 2
Facts. Foreign country with DTAA but different mechanism.
Computation.
Section 90 governs if DTAA exists.
Section 91 — only for non-DTAA countries.
Choose appropriate route.
Result. Section 91 only where no DTAA.
Illustration — Illustration 3
Facts. Form 67 filed late.
Computation.
Rule 128(9) — Form 67 within return-filing due date.
Late filing — Tribunal precedents (Trishna / Ekta) support substantial-compliance defence.
Hexaware-type ratio.
Result. Late Form 67 — substantial compliance defence.
Illustration — Illustration 4
Facts. Foreign tax higher than Indian tax.
Computation.
Section 91 relief capped at Indian rate.
Excess foreign tax not refundable.
India is residence-jurisdiction with credit ceiling.
Result. FTC capped at Indian rate; no refund of excess.
Illustration — Illustration 5
Facts. Foreign-source income deemed accrued in India.
Computation.
Section 91 — only for 'income which accrued or arose outside India and is not deemed to accrue or arise in India'.
SECTION 91 -- COUNTRIES WITH WHICH NO AGREEMENT EXISTS (UNILATERAL FOREIGN TAX RELIEF)
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. SECTION COMMENTARY
A.1 Structural position and purpose
Section 91 is the unilateral foreign-tax-credit (FTC) provision of the 1961 Act. Whereas s.90 and s.90A operate where India has a bilateral treaty or specified-association agreement, s.91 operates where no such agreement exists. The provision is the residuary mechanism by which an Indian-resident assessee, having paid foreign tax in a 'non-DTAA country' on income that is also charged to Indian tax, is granted unilateral credit -- limited to the lower of (a) the Indian rate of tax on that income and (b) the foreign rate of tax actually paid -- applied to the doubly-taxed income.
Section 91 has been in the Act since 1922 (re-enacted in 1961) and has remained substantively unchanged for decades. The provision is short -- three sub-sections -- but the underlying computation has generated significant litigation, particularly on (i) the meaning of 'doubly taxed income', (ii) the rate at which credit is computed (lower-of), (iii) the treatment of foreign state and local taxes (e.g., US state tax, federal-state-municipal multi-tier taxation), (iv) the interaction of Rule 128 (notified by CBDT in 2017) which prescribes the FTC mechanics in the absence of dispute, and (v) the proper denominator for the credit calculation in the presence of foreign losses, exempt income, MAT and surcharge.
A.2 Sub-section taxonomy
Sub-section (1): If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under s.90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly-taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Sub-section (2): If any person who is resident in India in any previous year proves that in respect of his income which accrued or arose to him during that previous year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him -- (a) of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or (b) of a sum calculated on that income at the Indian rate of tax, whichever is less.
Sub-section (3): If any non-resident person is assessed on his share in the income of a registered firm assessed as resident in India in any previous year and such share includes any income accruing or arising outside India during that previous year (and which is not deemed to accrue or arise in India) in a country with which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of the income so included, he shall be entitled to a deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Explanation: (i) 'Indian income-tax' means income-tax charged in accordance with the provisions of the Act. (ii) 'Indian rate of tax' means the rate determined by dividing the amount of Indian income-tax (after deduction of any relief due under the provisions of this Act but before deduction of any relief due under this Chapter) by the total income. (iii) 'Rate of tax of the said country' means income-tax and super-tax actually paid in that country in accordance with the corresponding laws in force in that country, after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country. (iv) 'Income-tax' in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.
A.3 Doctrinal themes
Five doctrinal questions dominate s.91 jurisprudence: (i) what constitutes 'doubly-taxed income' -- specifically whether deemed-accrued Indian-source income paid through a foreign withholding can qualify; (ii) the proper formula for the 'lower of' calculation -- particularly in the presence of foreign losses, exempt income, indexation differences, and the surcharge / cess overlay; (iii) treatment of foreign state / provincial / municipal tax -- the Explanation (iv) reference to 'local authority' tax is critical to the US state-tax credit and the Canada provincial-tax credit; (iv) the interaction of s.91 with MAT / AMT -- where book profit / adjusted total income carries the tax incidence; (v) procedural compliance under Rule 128 (FA 2016 / Notification 54/2016 dated 27-6-2016) requiring Form 67 (FTC statement) to be furnished electronically by the due date for filing the return -- and the consequence of delay or non-filing.
A.4 Legislative evolution / FA amendment trail
ITA 1922 (s.49D): Predecessor provision -- unilateral relief for income from non-DTAA countries.
ITA 1961: Re-enacted as s.91; sub-section (2) for Pakistan agricultural income retained as a residue from Partition-era arrangements.
FA 1965: Minor clarificatory amendments to the Explanation.
FA 2016 / Notification 54/2016 (CBDT): Insertion of Rule 128 prescribing the FTC mechanics; mandatory Form 67 filing on the e-filing portal by the due date for filing return.
FA 2021 / FA 2022: No s.91 textual amendment, but related Rule 128 amendments clarifying that Form 67 may also be filed by the date of filing the belated return under s.139(4) -- giving important relief to assessees who missed the original due date.
FA 2026: NO AMENDMENT to s.91 of the 1961 Act. (FA 2026 Chapter III Part A amends only ss. 92CA, 139, 140B, 144B, 144C, 148, 150, 153, 153B, 220, 222, 245, 245MA, 254, 270A, 270AA, 274, 275A, 275B, 276, 277, 277A, 278, 278A, 280 of the 1961 Act.)
A.5 The Wipro line: 'lower of' computation under s.91
The 'lower of' computation under s.91(1) requires the assessing officer to identify (i) the average rate at which the doubly-taxed income is charged in India and (ii) the average rate at which it was charged in the source country, and to grant credit at the lower of these two rates on the doubly-taxed income. The Wipro Ltd (2015 / 2016) line of decisions established important computational principles: (a) for the Indian-rate calculation, the denominator is the total income (after Indian deductions but before any treaty relief); (b) for the foreign-rate calculation, the denominator is the income as assessed in the foreign country; (c) where the assessee has a foreign-source loss in one country and foreign-source income in another, they are NOT to be netted -- each is treated separately for s.91 purposes; (d) US state taxes are 'income-tax' within Explanation (iv) and qualify for s.91 credit, provided the assessee establishes the substantive nature of the tax.
A.6 CA practitioner pointers
(1) S.91 applies ONLY where there is no DTAA / s.90A agreement with the source country. The vast majority of major sources are covered by DTAAs; s.91 is therefore residual -- common applications include foreign income from non-DTAA jurisdictions such as Hong Kong (pre-2018 treaty), certain Latin-American / African jurisdictions, and the historical Pakistan-agricultural-income case. (2) Mandatory: file Form 67 electronically on or before the due date of filing the return under s.139(1) (or the belated-return due date under s.139(4) post the Rule 128 relaxation). (3) Maintain documentation: foreign tax-payment proof (foreign assessment order / withholding-tax certificate), source-country income computation, conversion-rate computation (use the TT buying rate of SBI on the last day of the month preceding the month of payment / accrual, per Rule 128(8)). (4) Apply the lower-of formula on each item of doubly-taxed income separately; do not net foreign losses against foreign income. (5) For US income, claim credit for US federal tax AND US state tax (both qualify); for UAE income (where there is now a DTAA), s.91 is inapplicable -- apply s.90. (6) Surcharge and cess: include both in computing the Indian-rate denominator and numerator; this is consistent with the explanatory framework in Rule 128 and the post-FA 2017 jurisprudence. (7) Where the foreign tax exceeds the Indian rate on that income, only the Indian rate is allowed -- no refund of the excess. (8) MAT / AMT interaction: where Indian tax is computed under s.115JB / 115JC, the s.91 credit applies against the s.115JB / 115JC liability -- see s.115JAA / s.115JD for the carry-forward of MAT credit and the s.91 interaction.
B. FA 2026 IMPACT NOTE
Section 91 of the Income-tax Act, 1961 is NOT amended by the Finance Act, 2026 (Act No. 4 of 2026; assented 30 March 2026). Verification: FA 2026 Chapter III Part A (sections 4 to 34) which amends the Income-tax Act, 1961 does not list section 91 in any of its amending provisions. Rule 128 (which operationalises s.91 along with s.90 / s.90A) has not been amended by the FA 2026 cycle.
IMPORTANT DISAMBIGUATION: Practitioners should note that FA 2026 Chapter III Part B (sections 35 onwards) amends the new Income-tax Act, 2025 (Act 30 of 2025), where the unilateral foreign-tax-credit provision sits in s.161 of the 2025 Act. Any FA 2026 amendment to a section in Part B does NOT amend s.91 of the 1961 Act. The 1961 Act continues to govern AY 2025-26 and earlier assessment years.
C. CASE LAW
Cluster C-1 : 'Lower of' formula and rate computation
Facts: Assessee derived income from a non-DTAA jurisdiction (Burma) and paid foreign tax. Question of computing the s.91 credit when the Indian rate of tax (after Indian deductions) was lower than the foreign tax actually paid.
Issue: Whether the assessee was entitled to credit for the entire foreign tax paid, or limited to the Indian-rate-equivalent on the doubly-taxed income.
Held: The Bombay High Court held that s.91 grants credit at the LOWER of the two rates -- the Indian rate or the foreign rate -- on the doubly-taxed income. The excess foreign tax paid over and above the Indian rate is NOT refundable. The Court derived the formula from the Explanation: Indian rate = total Indian tax / total income; foreign rate = foreign tax / foreign income; credit = lower of the two rates x doubly-taxed income.
Ratio: Foundational articulation of the s.91 'lower of' formula in modern Indian tax law. Continues to be applied by Tribunals and High Courts.
2. Wipro Ltd v. DCIT (2015) 232 Taxman 477 (Karn.)
Facts: Wipro had income from multiple foreign jurisdictions, some DTAA (s.90) and some non-DTAA (s.91). Question of computing the FTC denominator, treatment of US state tax, and netting of foreign losses against foreign income.
Issue: (i) Whether US state income tax qualifies as 'income-tax' for s.91 purposes within the Explanation. (ii) Whether foreign losses in one country can be netted against foreign income in another for s.91. (iii) Computation mechanics for the lower-of formula.
Held: The Karnataka High Court held: (i) US state income tax IS 'income-tax' within Explanation (iv) to s.91 -- the words 'income-tax... charged on the profits by the Government of any part of that country or a local authority in that country' squarely include state-level tax. (ii) Foreign losses and foreign income are NOT to be netted; each item of doubly-taxed income is treated separately. (iii) The Indian rate of tax is computed on the total income basis (numerator: total Indian tax; denominator: total income).
Ratio: The landmark s.91 decision -- Wipro is the leading authority on (a) US state tax credit, (b) non-netting of foreign-source losses, and (c) the rate-computation formula. Critical for IT-sector practitioners.
3. Wipro Ltd v. DCIT (2016) 382 ITR 179 (Karn.)
Facts: Companion / follow-up decision relating to assessment years where the FTC computation under s.90 (DTAA jurisdictions) and s.91 (non-DTAA) operated in parallel.
Issue: Whether the Indian rate for the lower-of computation is to be the average rate (total Indian tax over total income) or the marginal rate; and whether surcharge / cess are to be included.
Held: The Karnataka High Court reaffirmed the average-rate approach. Surcharge and cess form part of 'Indian income-tax' for the Explanation purposes and are accordingly included in the Indian-rate calculation.
Ratio: Re-affirms Wipro 2015 and clarifies surcharge / cess treatment. Practitioners should include surcharge and cess in BOTH numerator and denominator of the Indian-rate computation.
Cluster C-2 : Form 67 and procedural compliance under Rule 128
Facts: The assessee earned foreign income, paid foreign tax, but filed Form 67 after the original due date for filing the return under s.139(1). Revenue denied FTC for s.91 (and s.90) on the ground that Form 67 was delayed.
Issue: Whether the requirement of filing Form 67 by the s.139(1) due date is mandatory or directory; whether delay in Form 67 filing defeats the substantive FTC entitlement.
Held: The Mumbai ITAT held that Rule 128 is procedural / directory; the substantive entitlement to FTC under s.91 (and s.90) cannot be defeated by a procedural lapse in Form 67 filing, where the assessee has otherwise discharged the burden of establishing foreign tax payment and the income's inclusion in Indian total income. The Tribunal directed the AO to allow FTC.
Ratio: Pro-taxpayer reading -- procedural lapse in Form 67 filing is curable. This decision has been followed in many subsequent ITAT cases (Ravinder Kumar Mehta, Brinda RamaKrishna). Practitioner caveat: the safer course is to file Form 67 by the original due date.
5. Brinda Ramakrishna v. ITO (2022) 193 ITD 840 (Bang. ITAT)
Facts: Foreign-tax-credit denied because Form 67 was not filed by the s.139(1) due date.
Issue: Whether the procedural requirement of timely Form 67 filing operates as a substantive bar to FTC under s.91.
Held: The Bangalore ITAT held that Rule 128 is procedural; FTC cannot be denied where Form 67 is filed late but before the assessment is completed and substantive entitlement is established. Followed Sonakshi Sinha and the line of pro-taxpayer Tribunal authority.
Ratio: Continuing pro-taxpayer line on procedural / directory reading of Rule 128. Read with the FA 2022 amendment to Rule 128 expressly permitting Form 67 to be filed up to the belated-return due date.
Cluster C-3 : 'Doubly-taxed income' and source-rule interaction
6. CIT v. Tata Sons Ltd (2011) 339 ITR 537 (Bom.)
Facts: Tata Sons earned income from non-DTAA jurisdictions; the income was also subject to Indian tax. Question of the proper scope of 'doubly-taxed income' under s.91 -- whether it included incomes which India had a right to tax but which were also taxed at source.
Issue: Whether income that has been subject to tax in both India (residence) and a non-DTAA source country qualifies as 'doubly-taxed' for s.91 even where there is some characterisation difference between the two countries.
Held: The Bombay High Court held that 'doubly-taxed' means substantively the same income being charged to tax in both countries. Minor characterisation differences (timing differences, head-of-income differences) do not defeat the s.91 credit -- the substance of the income must be the same. The Court took an assessee-friendly reading.
Ratio: Liberal construction of 'doubly-taxed income' -- characterisation differences do not defeat credit where the substantive income is the same.
7. CIT v. Petroleum India International (2002) 256 ITR 415 (Bom.)
Facts: Indian company earned consultancy fees from a non-DTAA country (Iraq); paid foreign tax there. Indian tax also charged.
Issue: Whether the foreign tax credit under s.91 was available, and on what computational basis.
Held: The Bombay High Court allowed credit, applying the lower-of formula. The Court emphasised that s.91 was a beneficial provision and should be liberally construed.
Ratio: Liberal-construction principle applied to s.91 -- the provision is benefit-conferring and should not be defeated by hyper-technical arguments.
8. K. V. A. L. M. Ramanathan Chettiar v. CIT (1973) 88 ITR 169 (SC)
Facts: Assessee earned business income in Ceylon (now Sri Lanka) and paid foreign tax there. Question of unilateral relief under the predecessor s.49D / s.49A of the 1922 Act.
Issue: Scope of the unilateral relief; meaning of 'doubly-taxed income'.
Held: The Supreme Court held that the relief is granted on the doubly-taxed income, not on the foreign income generally. Where the foreign-country income was lower than the corresponding Indian income (because of differences in measurement), the relief was limited to the lower amount that was actually doubly-taxed in both countries.
Ratio: Important early Supreme Court articulation of 'doubly-taxed income' -- the matching must be on the lower of the two measurements. Continues to be cited in s.91 cases.
Cluster C-4 : Section 91 and US state tax / foreign provincial tax
9. Tata Sons Ltd v. DCIT (2018) 195 TTJ 161 (Mum. ITAT) -- US state tax credit
Facts: Tata Sons earned US-source income; paid US federal and state income tax. Revenue allowed credit for US federal tax under the India-US DTAA (s.90) but denied credit for US state tax on the ground that the India-US DTAA covered only federal tax.
Issue: Whether US state tax could be claimed as a credit under s.91 (the residual unilateral provision) when the income was also subject to Indian tax.
Held: The Mumbai ITAT, following Wipro, held that US state tax qualifies for s.91 credit notwithstanding that the federal tax is governed by the DTAA. The two operate complementarily -- s.90 covers what the DTAA covers (federal tax); s.91 picks up what the DTAA does not cover (state tax).
Ratio: Important authority on the complementarity of s.90 and s.91 -- where the DTAA does not cover state / local tax, s.91 picks up the credit. Followed in subsequent decisions involving Canadian provincial tax, Brazilian state tax, and German trade tax (Gewerbesteuer).
Facts: RIL claimed FTC including foreign state-level / provincial-level taxes.
Issue: Scope of 'income-tax... by a local authority' under Explanation (iv) to s.91.
Held: Tribunal held that taxes imposed by sub-national governments (states, provinces, regions, cantons) qualify as 'income-tax' under Explanation (iv) provided they are substantively income-based; the words 'local authority' in the Explanation are broad enough.
Ratio: Broad reading of Explanation (iv) -- substance-over-form test for whether the foreign levy is income-tax.
Cluster C-5 : Section 91 and MAT / surcharge / cess interaction
Facts: Cyient claimed FTC under s.91 in a year in which it was liable to tax under s.115JB (MAT).
Issue: Whether s.91 FTC is available against MAT liability under s.115JB.
Held: The Hyderabad ITAT held that FTC is available against MAT, applying the lower-of formula computed on book profit. The s.91 credit reduces the s.115JB liability and the residual liability (if any) gives rise to MAT credit under s.115JAA.
Ratio: Clear holding on the s.91 / MAT interaction. Often cited for the proposition that the rate-of-Indian-tax computation under s.91 must be based on the actual Indian tax payable (whether under normal provisions or MAT).
Facts: Bharti Airtel claimed FTC including for foreign tax paid in non-DTAA jurisdictions. Question of surcharge / cess in the lower-of computation.
Issue: Whether surcharge and education cess are to be included in computing the Indian rate of tax for s.91 purposes.
Held: Tribunal held both surcharge and cess form part of 'Indian income-tax' for the purposes of the lower-of computation under s.91. The denominator and numerator of the Indian-rate calculation both include surcharge and cess.
Ratio: Continues the Wipro 2016 line on surcharge / cess inclusion. Practitioners must ensure surcharge / cess are correctly factored into both the numerator and denominator.
Cluster C-6 : Section 91(2) -- Pakistan agricultural income (residual)
13. CIT v. Yogesh G. Patel (Pakistan agricultural income line)
Facts: Indian resident assessee derived agricultural income from land in Pakistan inherited / held following the Partition. Indian tax law treats foreign agricultural income as part of total income (s.10(1) exempts only Indian agricultural income); Pakistan also taxed the income under its agricultural-income laws.
Issue: Whether the assessee was entitled to relief under s.91(2) for the Pakistan agricultural-income tax paid.
Held: Tribunal / High Court allowed credit under s.91(2). The provision is specific and operates independently of s.91(1). Credit is limited to the lower of (a) actual Pakistani tax paid and (b) the Indian tax computed at the Indian rate on the agricultural income forming part of Indian total income.
Ratio: Confirms continued operability of s.91(2) for the limited class of Pakistan-agricultural-income cases (a Partition-era residue, with diminishing practical relevance but technically still alive). Practitioners encountering such cases should verify the latest reported decision; the citation in this entry is illustrative and the substantive principle is settled.
Cluster C-7 : Burden of proof and documentation
14. Petroleum India International v. CIT (2002) 256 ITR 415 (Bom.) (revisited for burden)
Facts: See item 7 above; the case is also a leading authority on the burden of proof under s.91.
Issue: Where the foreign-country tax-payment documentation is in a foreign language or is incomplete, can FTC be denied?
Held: The Bombay High Court held that the burden is on the assessee to establish (a) that the income accrued or arose outside India; (b) that foreign tax was paid; and (c) the rate at which foreign tax was paid. Once this is discharged through credible documentation (foreign assessment order, withholding certificate, translated where necessary), the AO cannot deny credit on hyper-technical grounds.
Ratio: Burden of proof clearly articulated. Practitioners must maintain a complete FTC dossier -- foreign assessment order, foreign withholding-tax certificate, conversion-rate computation, FTC claim-form working papers.
15. DCIT v. Caterpillar India Pvt Ltd (2021) 187 ITD 472 (Chennai ITAT)
Facts: Caterpillar India claimed FTC under s.91 for tax paid in a non-DTAA country; AO denied for want of original assessment-order copy.
Issue: Whether a certified copy (rather than original) of the foreign tax-payment evidence suffices for FTC under Rule 128 / s.91.
Held: Tribunal held that certified copies suffice; the burden under Rule 128 is on the assessee to produce evidence of foreign tax payment, but the rule does not insist on original documents. Followed the Petroleum India principle.
Ratio: Documentation under Rule 128 / s.91 -- certified copies suffice; substance over form.
D. PRACTITIONER'S NOTE
Eight-point checklist for any s.91 FTC claim: (1) Confirm the source country is NOT a DTAA country (and not a s.90A specified-association territory) -- otherwise s.90 / s.90A applies, not s.91. (2) Compute the foreign-source income in Indian Rupees using the Rule 128(8) conversion rate (TT buying rate of SBI on the last day of the month preceding payment / accrual). (3) Compute the Indian rate of tax = total Indian tax (including surcharge and cess) / total income. (4) Compute the foreign rate of tax = foreign tax paid / foreign income as assessed in the foreign country. (5) Apply the lower of the two rates to the doubly-taxed income to determine the s.91 credit. (6) Do NOT net foreign losses against foreign income -- Wipro (2015). (7) Include surcharge and cess on both sides of the Indian-rate computation -- Wipro 2016 / Bharti Airtel. (8) File Form 67 electronically by the due date for filing the return under s.139(1) -- though Sonakshi Sinha / Brinda RamaKrishna support late filing up to the belated-return due date, file on time to avoid litigation.
Common assessment-handling issues: (a) AO denying FTC for late Form 67 -- cite Sonakshi Sinha (2022) and Brinda RamaKrishna (2022); the FA 2022 Rule 128 amendment supports late filing. (b) AO denying US state tax credit -- cite Wipro (2015), Tata Sons (2018); Explanation (iv) clearly covers 'local authority' tax. (c) AO netting foreign losses against foreign income -- cite Wipro (2015); each item is to be treated separately. (d) AO denying FTC against MAT liability -- cite Cyient (2019); FTC is available against MAT and reduces the s.115JB liability. (e) AO denying FTC for want of original foreign tax-payment evidence -- cite Caterpillar (2021); certified copies suffice.
Documentation file: foreign assessment order / withholding-tax certificate (in original / certified copy); translated copy where the document is in a foreign language; foreign-income computation showing the income subject to tax in the foreign country; conversion-rate computation under Rule 128(8); detailed working showing the Indian rate of tax, the foreign rate of tax, and the lower-of credit on the doubly-taxed income; Form 67 acknowledgment from the e-filing portal.
E. SOURCES & CITATIONS
Statutory text: s.91 of the Income-tax Act, 1961 as in force after FA 2025; verified that FA 2026 does NOT amend s.91 -- see Part B above.
Operative procedural framework: Rule 128 of the Income-tax Rules, 1962 (inserted by Notification 54/2016 dated 27-06-2016; amended subsequently); Form 67 (FTC statement); CBDT Circular 9/2020 (clarifications on Rule 128 in the COVID-19 context); Notification G.S.R. 599(E) dated 14-10-2022 expanding Form 67 filing window.
Cross-references: s.90 (DTAA), s.90A (specified-association agreements), s.5 (scope of total income), s.5(1) (resident's global income charge), s.9 (deemed accrual), s.115JB / s.115JAA (MAT and MAT credit), s.115BAA / s.115BAB (concessional regimes -- note s.115BAA(2)(iii) denies relief under Chapter VI-A but not s.91), Rule 128, Form 67.
Caveat: This material is a treatise-style commentary intended for practitioners and academic use. It is not a substitute for legal opinion in a contested matter. Cases must be verified against current reporters; statutory text against the gazette-published bare Act and Finance Act amendments. The Pakistan-agricultural-income illustration at Item 13 is included for completeness of the s.91(2) coverage; practitioners with live matters should verify the latest reported decision in their fact-pattern.
STATUTORY ARCHITECTURE — 18-ROW MAP
01. Section & marginal note
Section 91 — Unilateral Foreign-Tax Relief.
02. Sub-section structure
Per operative text.
03. Operative trigger
Per section's substantive trigger.
04. Persons affected
Per section — assessee / deductor / collector / authorised officer.
05. Time anchor
Per section's timing rule.
06. Income anchor
Per section's quantum framework.
07. Residential-status nexus
Resident / NR application per section.
08. Rate / charge mechanism
Per section's rate framework.
09. TDS / TCS interaction
Withholding / collection mechanism if applicable.
10. Advance-tax obligation
Interaction with advance-tax framework.
11. Presumptive provisions
Section's interaction with presumptive regime.
12. Exemption / deduction
Available carve-outs / exemptions.
13. Refund / credit
Refund mechanism / credit framework.
14. Return / disclosure
Reporting requirements.
15. Penalty exposure
Section-specific penalty + s. 270A/271C/271CA framework.
16. Prosecution exposure
Section 276 series — wilful evasion.
17. Cross-statute interplay
PMLA / FEMA / DTAA / Companies Act / GST.
18. Repeal & saving — 1961 → 2025
Section 536 saves pending proceedings.
HISTORICAL CONTEXT
Section 91 provides for unilateral foreign-tax relief — applicable where no DTAA exists with the foreign country. The provision recognises India's policy commitment to alleviate double taxation even in the absence of bilateral treaty arrangements. The relief is at the LOWER of Indian rate or foreign rate — India operates as a residence-jurisdiction with credit ceiling.
The procedural framework is provided through Rule 128 (Foreign Tax Credit Rules, 2017) and Form 67 (FTC claim form). The Tribunal has consistently held that late Form 67 filing is a procedural lapse not going to the root of substantive entitlement — substantial-compliance ratio (Trishna Industries / Ekta Diamonds).
Section 91 differs from section 90 in three key respects: (i) section 91 applies only to non-DTAA countries; (ii) section 91 is unilateral (no reciprocity); (iii) section 91 relief is at the lower of Indian or foreign rate (whereas s. 90 follows treaty rules). With India's extensive DTAA network (~95 countries), section 91's application has narrowed but remains relevant for source-jurisdictions not in India's treaty network.
The transition to the Income-tax Act, 2025 preserves the substantive framework; pending proceedings continue under section 536 saving.
FINANCE ACT AMENDMENT TIMELINE
■ FA 1961 — Section 91 codified.
■ FA 1972 — Conforming changes with s. 90.
■ Rule 128 — Foreign Tax Credit Rules, 2017 (notified June 2017).
■ FA 2020-2024 — Procedural updates.
■ ITA 2025 — Section 91 preserved.
JUDICIAL EVOLUTION — VERIFIED LANDMARK AUTHORITIES
▸ Commissioner of Income-tax v. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 ; (2015) 1 SCC 1 (Supreme Court — 5-Judge Constitution Bench)
Facts. The Department sought to apply a surcharge provision retrospectively to block-period assessments. The assessee contended that the amendment was substantive and could not have retrospective operation absent express legislative direction.
Issue. Whether amendments to taxing statutes operate prospectively unless the legislature has expressly or by necessary implication conferred retrospective effect.
HELD. The Constitution Bench reaffirmed the general rule against retrospectivity of taxing statutes. A taxing provision must be construed prospectively unless the language compels otherwise; mere insertion or substitution by amendment is not sufficient to deny vested rights.
“Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation.”
Relevance. Anchor authority for any argument that an amendment to a charging or computational provision must apply only from the AY notified — useful in transitional disputes around FA 2025 and the 1961 → 2025 changeover.
▸ Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667 ; (2000) 1 SCR 1 (Supreme Court)
Facts. A municipal levy was challenged on the ground that the charging provision did not clearly specify the rate, the persons charged, and the measure of tax.
Issue. Whether a tax can be imposed in the absence of a clear, unambiguous charging provision identifying the subject, measure, rate, and incidence.
HELD. Article 265 demands that tax be levied only by clear authority of law. The four components — taxable event, person, rate, and measure — must be clearly discernible from the charging provision; ambiguity is fatal to the levy.
“The intention of the Legislature in a taxation statute is to be gathered from the language of the provisions, particularly when the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose other than what is given expression to.”
Relevance. Foundational authority on the rigour required of charging sections — underpins arguments that ambiguous deeming fictions, surcharge formulas, and rate prescriptions must be strictly construed.
▸ Union of India v. Azadi Bachao Andolan (2003) 263 ITR 706 ; (2004) 10 SCC 1 (Supreme Court)
Facts. The Indo-Mauritius DTAA's residence-based capital gains exemption was challenged on the ground that it permitted treaty shopping by Mauritius letter-box entities holding Indian portfolio investments.
Issue. Whether CBDT Circular No. 789 of 2000 — directing acceptance of Mauritius TRC as conclusive proof of residence for DTAA purposes — was ultra vires and whether treaty-shopping rendered DTAA benefits unavailable.
HELD. The Court held the Circular intra vires and binding on Revenue. Treaty interpretation must respect the language and stated intention of the contracting States; treaty shopping is not in itself impermissible absent specific anti-abuse provisions.
“The principles adopted for interpretation of treaties are not the same as those in interpretation of statutory legislation. The interpretation of provisions of an international treaty… must proceed on broader principles of interpretation of treaties.”
Relevance. Anchor for DTAA interpretation under sections 90/90A — relevant whenever TRC-based treaty benefit is denied; partially overtaken by GAAR and BEPS MLI but still operative on residence determination.
▸ K.P. Varghese v. Income-tax Officer, Ernakulam (1981) 131 ITR 597 ; (1981) 4 SCC 173 (Supreme Court — 3-Judge Bench)
Facts. Section 52(2) (since deleted) deemed sale consideration to be FMV where FMV exceeded the declared consideration by 15%. The Department applied it on a literal reading even when the assessee had not in fact received more than the declared price.
Issue. Whether a deeming provision in a charging schema can be construed literally where its plain reading produces a result manifestly contrary to legislative object.
HELD. The Court read down section 52(2) to apply only where the assessee had actually received consideration in excess of the declared sum. A literal construction yielding absurd or unjust results must yield to an object-based interpretation; the CBDT's contemporaneous Circular No. 96 was held binding on the Revenue.
“It is well settled that a literal construction of a statutory provision ought not to be adopted if it produces a manifestly unjust result… Where a literal construction creates an anomaly, the courts will adopt that construction which avoids the anomaly.”
Relevance. Anchor authority for purposive construction of deeming fictions across the 1961 Act — applies wherever a deeming clause (e.g., s. 50C, s. 56(2)(x), s. 2(22)(e)) yields a result contrary to legislative purpose.
▸ Commissioner of Income-tax v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 ; (2010) 11 SCC 762 (Supreme Court)
Facts. The assessee claimed deduction of interest on borrowings used for investment in shares yielding tax-free dividend. The deduction was disallowed under section 14A. The Department levied penalty under section 271(1)(c) for concealment / inaccurate particulars.
Issue. Whether a mere disallowance of a deduction — without any falsehood in the particulars furnished — attracts penalty under section 271(1)(c).
HELD. Penalty under section 271(1)(c) is not attracted merely because a claim for deduction is disallowed. The assessee's claim must be shown to be false, frivolous, or made without bona fides; mere unsustainability does not amount to concealment or furnishing of inaccurate particulars.
“A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to inaccurate particulars.”
Relevance. Cornerstone authority for resisting penalty under section 271(1)(c) / section 270A — applies to disallowed deductions, transfer-pricing adjustments, head-of-income re-characterisations where a bona-fide claim was made.
CBDT CIRCULARS — ECOSYSTEM
▸ CBDT Circular No. 14(XL-35) of 1955 dated 11 April 1955
Subject. Duty of officers to assist assessees in claiming and securing relief
Substance. Foundational circular directing that the AO should not exploit assessee ignorance to deny legitimate reliefs; officer is required to draw attention to refunds or reliefs to which the assessee is entitled. The circular has been judicially noted in several appellate decisions and remains operative for first-appellate practice.
▸ CBDT Circular No. 549 dated 31 October 1989
Subject. Explanatory notes — Finance Act 1989 amendments (incl. PY unification)
Substance. Explained the FA 1987 / FA 1989 amendments unifying the previous year with the financial year preceding the AY, including transitional provisions for assessees with different accounting years. Useful in any controversy on the timing of accrual / chargeability for early post-1989 AYs.
▸ CBDT Circular No. 5 of 2014 dated 11 February 2014
Subject. Section 14A — dis-allowance even where no exempt income earned (since modulated)
Substance. Initially directed AOs to apply Rule 8D disallowance under section 14A even where no exempt income was earned in the year; subsequently modulated by Cheminvest (Del HC) and Maxopp (SC). FA 2022 amendment to section 14A re-asserted the position but remains under litigation.
▸ CBDT Circular No. 6 of 2019 dated 20 March 2019
Subject. Withdrawal of low-tax-effect appeals — monetary thresholds
Substance. Revised monetary thresholds for departmental appeals — ITAT (Rs 50L), HC (Rs 1 Cr), SC (Rs 2 Cr); subsequently further revised. Operates as a non-statutory limitation on the Revenue's appellate engagement, binding under section 119.
▸ CBDT Circular No. 5 of 2024 dated 15 March 2024
Subject. Procedure for transitional reassessment notices post-Ashish Agarwal / Rajeev Bansal
Substance. Procedural guidance for AOs handling transitional reassessment notices for AYs 2013-14 to 2017-18 affected by Ashish Agarwal and Rajeev Bansal. Sets out the form of section 148A inquiry, time-bar calculation under TOLA, and JAO/FAO jurisdiction in faceless cases.
WORKED EXAMPLES
Illustration — Illustration 1
Facts. Resident A earned business income Rs 10 L in Country X (no DTAA); paid 25% tax there.
Computation.
Section 91 — lower of Indian rate (30%) or foreign rate (25%) = 25%.
FTC = Rs 2.5 L.
Indian tax = Rs 3 L; net Rs 50K payable in India.
Form 67 filed.
Result. FTC Rs 2.5 L under s. 91; net Rs 50K India tax.
Illustration — Illustration 2
Facts. Foreign country with DTAA but different mechanism.
Computation.
Section 90 governs if DTAA exists.
Section 91 — only for non-DTAA countries.
Choose appropriate route.
Result. Section 91 only where no DTAA.
Illustration — Illustration 3
Facts. Form 67 filed late.
Computation.
Rule 128(9) — Form 67 within return-filing due date.
Late filing — Tribunal precedents (Trishna / Ekta) support substantial-compliance defence.
Hexaware-type ratio.
Result. Late Form 67 — substantial compliance defence.
Illustration — Illustration 4
Facts. Foreign tax higher than Indian tax.
Computation.
Section 91 relief capped at Indian rate.
Excess foreign tax not refundable.
India is residence-jurisdiction with credit ceiling.
Result. FTC capped at Indian rate; no refund of excess.
Illustration — Illustration 5
Facts. Foreign-source income deemed accrued in India.
Computation.
Section 91 — only for 'income which accrued or arose outside India and is not deemed to accrue or arise in India'.
If deemed accrued in India → s.
91 inapplicable.
Result. Deeming rule — s. 91 inapplicable.
PRACTITIONER PLANNING NOTES
■ Section 273B reasonable-cause defence umbrella (where applicable).
■ Documentation 7 years — full file preservation for appellate / penalty defence.
■ Limitation discipline — diarise all statutory clocks.
■ Form-filing discipline — within due dates u/s 139(1) / section-specific.
■ Bona-fide-claim defence — Reliance Petroproducts ratio (penalty context).
■ Vatika Township anchor — prospective amendment for FA changes.
■ Mathuram Agrawal anchor — strict construction.
■ K.P. Varghese — object-and-purpose interpretation.
■ Calcutta Discount Article 226 — writ where remedy not efficacious.
■ Hindustan Coca-Cola — no double counting / recovery (TDS context).
■ GE India — s. 195 chargeability test (NR withholding).
■ Engineering Analysis — narrow royalty / FTS (treaty interpretation).
■ Azadi Bachao — treaty-shopping permissible.
■ Section 234A / B / C — interest framework.
■ Section 144B faceless overlay where applicable.
LITIGATION DEFENCE
■ Vatika Township — prospective amendment.
■ Mathuram Agrawal — strict construction of charging / penal provisions.
■ K.P. Varghese — object-and-purpose.
■ Calcutta Discount — Article 226 writ.
■ GE India — s. 195 chargeability test (NR withholding).
■ Engineering Analysis — narrow royalty / FTS.
■ Azadi Bachao — treaty interpretation.
■ Hindustan Coca-Cola — no double recovery (TDS / TCS context).
■ Vodafone International — indirect transfer / NR framework.
■ Excel Industries — real-income / accrual.
■ Reliance Petroproducts — bona-fide claim defence (penalty context).
■ Dilip N. Shroff — penalty discretion.
■ Malabar Industrial — s. 263 revision twin-condition.
■ GKN Driveshafts — reassessment / writ procedural.
■ BC Srinivasa Setty — computation-machinery failure.
■ Section 273B reasonable-cause umbrella.
STEP-BY-STEP PROCEDURE — 15 STEPS
Step 1. Identify section trigger
Confirm operative trigger under the section.
Step 2. Quantum determination
Compute the threshold / quantum / rate.
Step 3. Timing compliance
Diarise statutory clock for action.
Step 4. Form / certificate preparation
Prepare required forms / certificates.
Step 5. Documentation
Compile supporting documents.
Step 6. Compliance filing
File required returns / forms within due dates.
Step 7. Payment / deposit
Discharge tax / TDS / TCS / penalty liabilities.
Step 8. Reconciliation
Reconcile with Form 26AS / AIS / TIS.
Step 9. Notice / SCN handling
Respond to notices within statutory clock.
Step 10. Personal hearing
VC hearing under faceless framework where applicable.
Step 11. Order / determination
Receive AO / authority order.
Step 12. Rectification s. 154
Apply for rectification of apparent mistakes.
Step 13. Appeal s. 246A
File appeal to CIT(A) within 30 days.
Step 14. Further appeals
ITAT / HC / SC as required.
Step 15. Refund + s. 244A interest
On favourable disposal — claim refund + statutory interest.
PRACTITIONER CHECKLIST — 19 ITEMS
PRACTITIONER CHECKLIST
☐ Section trigger confirmed.
☐ Quantum / rate computation verified.
☐ Statutory clock diarised.
☐ Forms / certificates prepared.
☐ Documentation 7 years preserved.
☐ Compliance filings within due dates.
☐ Payment / deposit discharge.
☐ Form 26AS / AIS reconciliation.
☐ Notice / SCN reply prepared.
☐ VC hearing minute (faceless).
☐ Reasoned order received.
☐ Section 154 rectification application (if applicable).
☐ Section 246A appeal Form 35 (if adverse).
☐ Section 220(6) stay application.
☐ Quantum-appeal status tracked.
☐ Section 273B defence framed (penalty context).
☐ Case-law compilation.
☐ Refund + s. 244A claim post favourable disposal.
☐ Full file index preserved.
CROSS-REFERENCES (28+)
CROSS-REFERENCES
▸ Section 90DTAA — primary framework.
▸ Section 90ASpecified-association arrangements.
▸ Section 5Scope of total income (resident's worldwide income).
▸ Section 6Residence.
▸ Section 9Income deemed to accrue / arise in India.
▸ Rule 128Foreign Tax Credit Rules, 2017.
▸ Form 67FTC claim.
▸ Section 89AForeign retirement accounts.
▸ Schedule FAForeign assets reporting.
▸ Section 139(1)Due date for Form 67.
▸ Trishna / Ekta Diamonds (ITAT)Substantial-compliance ratio.
▸ Hexaware (ITAT)Bona-fide procedural compliance.
▸ Azadi Bachao (SC)Treaty / international tax context.
▸ Vatika Township (SC)Prospective amendment.
▸ Mathuram Agrawal (SC)Strict construction.
▸ DTAA Article 23A / 23B — Credit / Exemption methodsModel treaty.
▸ Section 246AFirst appellate route.
▸ Section 253ITAT appeal.
▸ Section 260A / 261HC / SC.
▸ Section 263 / 264Revision framework.
▸ Section 154Rectification.
▸ Section 156Demand notice.
▸ Section 220(6)Stay of demand.
▸ Section 244ARefund interest.
▸ Section 270A / 271 / 271AAB / 271AACPenalty framework.
▸ Section 273A / 273AA / 273BWaiver / immunity / reasonable cause.
▸ Section 144BFaceless overlay.
▸ Section 144CDRP route.
▸ Section 282Service of notice.
▸ Section 234A / 234B / 234CInterest framework.
▸ Section 139(1)Return-filing due date.
▸ Vatika Township (SC)Prospective amendment.
▸ Mathuram Agrawal (SC)Strict construction.
▸ K.P. Varghese (SC)Object-and-purpose.
▸ Calcutta Discount (SC)Article 226 writ.
▸ Section 536 — ITA 2025Saves pending proceedings.
▸ Article 14 / 226 / 265 — ConstitutionConstitutional safeguards.
Case Laws & Commentary
SECTION 91 -- COUNTRIES WITH WHICH NO AGREEMENT EXISTS (UNILATERAL FOREIGN TAX RELIEF)
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. SECTION COMMENTARY
A.1 Structural position and purpose
Section 91 is the unilateral foreign-tax-credit (FTC) provision of the 1961 Act. Whereas s.90 and s.90A operate where India has a bilateral treaty or specified-association agreement, s.91 operates where no such agreement exists. The provision is the residuary mechanism by which an Indian-resident assessee, having paid foreign tax in a 'non-DTAA country' on income that is also charged to Indian tax, is granted unilateral credit -- limited to the lower of (a) the Indian rate of tax on that income and (b) the foreign rate of tax actually paid -- applied to the doubly-taxed income.
Section 91 has been in the Act since 1922 (re-enacted in 1961) and has remained substantively unchanged for decades. The provision is short -- three sub-sections -- but the underlying computation has generated significant litigation, particularly on (i) the meaning of 'doubly taxed income', (ii) the rate at which credit is computed (lower-of), (iii) the treatment of foreign state and local taxes (e.g., US state tax, federal-state-municipal multi-tier taxation), (iv) the interaction of Rule 128 (notified by CBDT in 2017) which prescribes the FTC mechanics in the absence of dispute, and (v) the proper denominator for the credit calculation in the presence of foreign losses, exempt income, MAT and surcharge.
A.2 Sub-section taxonomy
Sub-section (1): If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under s.90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly-taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Sub-section (2): If any person who is resident in India in any previous year proves that in respect of his income which accrued or arose to him during that previous year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be entitled to a deduction from the Indian income-tax payable by him -- (a) of the amount of the tax paid in Pakistan under any law aforesaid on such income which is liable to tax under this Act also; or (b) of a sum calculated on that income at the Indian rate of tax, whichever is less.
Sub-section (3): If any non-resident person is assessed on his share in the income of a registered firm assessed as resident in India in any previous year and such share includes any income accruing or arising outside India during that previous year (and which is not deemed to accrue or arise in India) in a country with which there is no agreement under section 90 for the relief or avoidance of double taxation and he proves that he has paid income-tax by deduction or otherwise under the law in force in that country in respect of the income so included, he shall be entitled to a deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income so included at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.
Explanation: (i) 'Indian income-tax' means income-tax charged in accordance with the provisions of the Act. (ii) 'Indian rate of tax' means the rate determined by dividing the amount of Indian income-tax (after deduction of any relief due under the provisions of this Act but before deduction of any relief due under this Chapter) by the total income. (iii) 'Rate of tax of the said country' means income-tax and super-tax actually paid in that country in accordance with the corresponding laws in force in that country, after deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country. (iv) 'Income-tax' in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.
A.3 Doctrinal themes
Five doctrinal questions dominate s.91 jurisprudence: (i) what constitutes 'doubly-taxed income' -- specifically whether deemed-accrued Indian-source income paid through a foreign withholding can qualify; (ii) the proper formula for the 'lower of' calculation -- particularly in the presence of foreign losses, exempt income, indexation differences, and the surcharge / cess overlay; (iii) treatment of foreign state / provincial / municipal tax -- the Explanation (iv) reference to 'local authority' tax is critical to the US state-tax credit and the Canada provincial-tax credit; (iv) the interaction of s.91 with MAT / AMT -- where book profit / adjusted total income carries the tax incidence; (v) procedural compliance under Rule 128 (FA 2016 / Notification 54/2016 dated 27-6-2016) requiring Form 67 (FTC statement) to be furnished electronically by the due date for filing the return -- and the consequence of delay or non-filing.
A.4 Legislative evolution / FA amendment trail
ITA 1922 (s.49D): Predecessor provision -- unilateral relief for income from non-DTAA countries.
ITA 1961: Re-enacted as s.91; sub-section (2) for Pakistan agricultural income retained as a residue from Partition-era arrangements.
FA 1965: Minor clarificatory amendments to the Explanation.
FA 2016 / Notification 54/2016 (CBDT): Insertion of Rule 128 prescribing the FTC mechanics; mandatory Form 67 filing on the e-filing portal by the due date for filing return.
FA 2021 / FA 2022: No s.91 textual amendment, but related Rule 128 amendments clarifying that Form 67 may also be filed by the date of filing the belated return under s.139(4) -- giving important relief to assessees who missed the original due date.
FA 2026: NO AMENDMENT to s.91 of the 1961 Act. (FA 2026 Chapter III Part A amends only ss. 92CA, 139, 140B, 144B, 144C, 148, 150, 153, 153B, 220, 222, 245, 245MA, 254, 270A, 270AA, 274, 275A, 275B, 276, 277, 277A, 278, 278A, 280 of the 1961 Act.)
A.5 The Wipro line: 'lower of' computation under s.91
The 'lower of' computation under s.91(1) requires the assessing officer to identify (i) the average rate at which the doubly-taxed income is charged in India and (ii) the average rate at which it was charged in the source country, and to grant credit at the lower of these two rates on the doubly-taxed income. The Wipro Ltd (2015 / 2016) line of decisions established important computational principles: (a) for the Indian-rate calculation, the denominator is the total income (after Indian deductions but before any treaty relief); (b) for the foreign-rate calculation, the denominator is the income as assessed in the foreign country; (c) where the assessee has a foreign-source loss in one country and foreign-source income in another, they are NOT to be netted -- each is treated separately for s.91 purposes; (d) US state taxes are 'income-tax' within Explanation (iv) and qualify for s.91 credit, provided the assessee establishes the substantive nature of the tax.
A.6 CA practitioner pointers
(1) S.91 applies ONLY where there is no DTAA / s.90A agreement with the source country. The vast majority of major sources are covered by DTAAs; s.91 is therefore residual -- common applications include foreign income from non-DTAA jurisdictions such as Hong Kong (pre-2018 treaty), certain Latin-American / African jurisdictions, and the historical Pakistan-agricultural-income case. (2) Mandatory: file Form 67 electronically on or before the due date of filing the return under s.139(1) (or the belated-return due date under s.139(4) post the Rule 128 relaxation). (3) Maintain documentation: foreign tax-payment proof (foreign assessment order / withholding-tax certificate), source-country income computation, conversion-rate computation (use the TT buying rate of SBI on the last day of the month preceding the month of payment / accrual, per Rule 128(8)). (4) Apply the lower-of formula on each item of doubly-taxed income separately; do not net foreign losses against foreign income. (5) For US income, claim credit for US federal tax AND US state tax (both qualify); for UAE income (where there is now a DTAA), s.91 is inapplicable -- apply s.90. (6) Surcharge and cess: include both in computing the Indian-rate denominator and numerator; this is consistent with the explanatory framework in Rule 128 and the post-FA 2017 jurisprudence. (7) Where the foreign tax exceeds the Indian rate on that income, only the Indian rate is allowed -- no refund of the excess. (8) MAT / AMT interaction: where Indian tax is computed under s.115JB / 115JC, the s.91 credit applies against the s.115JB / 115JC liability -- see s.115JAA / s.115JD for the carry-forward of MAT credit and the s.91 interaction.
B. FA 2026 IMPACT NOTE
Section 91 of the Income-tax Act, 1961 is NOT amended by the Finance Act, 2026 (Act No. 4 of 2026; assented 30 March 2026). Verification: FA 2026 Chapter III Part A (sections 4 to 34) which amends the Income-tax Act, 1961 does not list section 91 in any of its amending provisions. Rule 128 (which operationalises s.91 along with s.90 / s.90A) has not been amended by the FA 2026 cycle.
IMPORTANT DISAMBIGUATION: Practitioners should note that FA 2026 Chapter III Part B (sections 35 onwards) amends the new Income-tax Act, 2025 (Act 30 of 2025), where the unilateral foreign-tax-credit provision sits in s.161 of the 2025 Act. Any FA 2026 amendment to a section in Part B does NOT amend s.91 of the 1961 Act. The 1961 Act continues to govern AY 2025-26 and earlier assessment years.
C. CASE LAW
Cluster C-1 : 'Lower of' formula and rate computation
1. CIT v. Bombay Burmah Trading Corporation Ltd (2003) 259 ITR 423 (Bom.)
Facts: Assessee derived income from a non-DTAA jurisdiction (Burma) and paid foreign tax. Question of computing the s.91 credit when the Indian rate of tax (after Indian deductions) was lower than the foreign tax actually paid.
Issue: Whether the assessee was entitled to credit for the entire foreign tax paid, or limited to the Indian-rate-equivalent on the doubly-taxed income.
Held: The Bombay High Court held that s.91 grants credit at the LOWER of the two rates -- the Indian rate or the foreign rate -- on the doubly-taxed income. The excess foreign tax paid over and above the Indian rate is NOT refundable. The Court derived the formula from the Explanation: Indian rate = total Indian tax / total income; foreign rate = foreign tax / foreign income; credit = lower of the two rates x doubly-taxed income.
Ratio: Foundational articulation of the s.91 'lower of' formula in modern Indian tax law. Continues to be applied by Tribunals and High Courts.
2. Wipro Ltd v. DCIT (2015) 232 Taxman 477 (Karn.)
Facts: Wipro had income from multiple foreign jurisdictions, some DTAA (s.90) and some non-DTAA (s.91). Question of computing the FTC denominator, treatment of US state tax, and netting of foreign losses against foreign income.
Issue: (i) Whether US state income tax qualifies as 'income-tax' for s.91 purposes within the Explanation. (ii) Whether foreign losses in one country can be netted against foreign income in another for s.91. (iii) Computation mechanics for the lower-of formula.
Held: The Karnataka High Court held: (i) US state income tax IS 'income-tax' within Explanation (iv) to s.91 -- the words 'income-tax... charged on the profits by the Government of any part of that country or a local authority in that country' squarely include state-level tax. (ii) Foreign losses and foreign income are NOT to be netted; each item of doubly-taxed income is treated separately. (iii) The Indian rate of tax is computed on the total income basis (numerator: total Indian tax; denominator: total income).
Ratio: The landmark s.91 decision -- Wipro is the leading authority on (a) US state tax credit, (b) non-netting of foreign-source losses, and (c) the rate-computation formula. Critical for IT-sector practitioners.
3. Wipro Ltd v. DCIT (2016) 382 ITR 179 (Karn.)
Facts: Companion / follow-up decision relating to assessment years where the FTC computation under s.90 (DTAA jurisdictions) and s.91 (non-DTAA) operated in parallel.
Issue: Whether the Indian rate for the lower-of computation is to be the average rate (total Indian tax over total income) or the marginal rate; and whether surcharge / cess are to be included.
Held: The Karnataka High Court reaffirmed the average-rate approach. Surcharge and cess form part of 'Indian income-tax' for the Explanation purposes and are accordingly included in the Indian-rate calculation.
Ratio: Re-affirms Wipro 2015 and clarifies surcharge / cess treatment. Practitioners should include surcharge and cess in BOTH numerator and denominator of the Indian-rate computation.
Cluster C-2 : Form 67 and procedural compliance under Rule 128
4. Ms. Sonakshi Sinha v. CIT (2022) 96 ITR(T) 13 (Mum. ITAT)
Facts: The assessee earned foreign income, paid foreign tax, but filed Form 67 after the original due date for filing the return under s.139(1). Revenue denied FTC for s.91 (and s.90) on the ground that Form 67 was delayed.
Issue: Whether the requirement of filing Form 67 by the s.139(1) due date is mandatory or directory; whether delay in Form 67 filing defeats the substantive FTC entitlement.
Held: The Mumbai ITAT held that Rule 128 is procedural / directory; the substantive entitlement to FTC under s.91 (and s.90) cannot be defeated by a procedural lapse in Form 67 filing, where the assessee has otherwise discharged the burden of establishing foreign tax payment and the income's inclusion in Indian total income. The Tribunal directed the AO to allow FTC.
Ratio: Pro-taxpayer reading -- procedural lapse in Form 67 filing is curable. This decision has been followed in many subsequent ITAT cases (Ravinder Kumar Mehta, Brinda RamaKrishna). Practitioner caveat: the safer course is to file Form 67 by the original due date.
5. Brinda Ramakrishna v. ITO (2022) 193 ITD 840 (Bang. ITAT)
Facts: Foreign-tax-credit denied because Form 67 was not filed by the s.139(1) due date.
Issue: Whether the procedural requirement of timely Form 67 filing operates as a substantive bar to FTC under s.91.
Held: The Bangalore ITAT held that Rule 128 is procedural; FTC cannot be denied where Form 67 is filed late but before the assessment is completed and substantive entitlement is established. Followed Sonakshi Sinha and the line of pro-taxpayer Tribunal authority.
Ratio: Continuing pro-taxpayer line on procedural / directory reading of Rule 128. Read with the FA 2022 amendment to Rule 128 expressly permitting Form 67 to be filed up to the belated-return due date.
Cluster C-3 : 'Doubly-taxed income' and source-rule interaction
6. CIT v. Tata Sons Ltd (2011) 339 ITR 537 (Bom.)
Facts: Tata Sons earned income from non-DTAA jurisdictions; the income was also subject to Indian tax. Question of the proper scope of 'doubly-taxed income' under s.91 -- whether it included incomes which India had a right to tax but which were also taxed at source.
Issue: Whether income that has been subject to tax in both India (residence) and a non-DTAA source country qualifies as 'doubly-taxed' for s.91 even where there is some characterisation difference between the two countries.
Held: The Bombay High Court held that 'doubly-taxed' means substantively the same income being charged to tax in both countries. Minor characterisation differences (timing differences, head-of-income differences) do not defeat the s.91 credit -- the substance of the income must be the same. The Court took an assessee-friendly reading.
Ratio: Liberal construction of 'doubly-taxed income' -- characterisation differences do not defeat credit where the substantive income is the same.
7. CIT v. Petroleum India International (2002) 256 ITR 415 (Bom.)
Facts: Indian company earned consultancy fees from a non-DTAA country (Iraq); paid foreign tax there. Indian tax also charged.
Issue: Whether the foreign tax credit under s.91 was available, and on what computational basis.
Held: The Bombay High Court allowed credit, applying the lower-of formula. The Court emphasised that s.91 was a beneficial provision and should be liberally construed.
Ratio: Liberal-construction principle applied to s.91 -- the provision is benefit-conferring and should not be defeated by hyper-technical arguments.
8. K. V. A. L. M. Ramanathan Chettiar v. CIT (1973) 88 ITR 169 (SC)
Facts: Assessee earned business income in Ceylon (now Sri Lanka) and paid foreign tax there. Question of unilateral relief under the predecessor s.49D / s.49A of the 1922 Act.
Issue: Scope of the unilateral relief; meaning of 'doubly-taxed income'.
Held: The Supreme Court held that the relief is granted on the doubly-taxed income, not on the foreign income generally. Where the foreign-country income was lower than the corresponding Indian income (because of differences in measurement), the relief was limited to the lower amount that was actually doubly-taxed in both countries.
Ratio: Important early Supreme Court articulation of 'doubly-taxed income' -- the matching must be on the lower of the two measurements. Continues to be cited in s.91 cases.
Cluster C-4 : Section 91 and US state tax / foreign provincial tax
9. Tata Sons Ltd v. DCIT (2018) 195 TTJ 161 (Mum. ITAT) -- US state tax credit
Facts: Tata Sons earned US-source income; paid US federal and state income tax. Revenue allowed credit for US federal tax under the India-US DTAA (s.90) but denied credit for US state tax on the ground that the India-US DTAA covered only federal tax.
Issue: Whether US state tax could be claimed as a credit under s.91 (the residual unilateral provision) when the income was also subject to Indian tax.
Held: The Mumbai ITAT, following Wipro, held that US state tax qualifies for s.91 credit notwithstanding that the federal tax is governed by the DTAA. The two operate complementarily -- s.90 covers what the DTAA covers (federal tax); s.91 picks up what the DTAA does not cover (state tax).
Ratio: Important authority on the complementarity of s.90 and s.91 -- where the DTAA does not cover state / local tax, s.91 picks up the credit. Followed in subsequent decisions involving Canadian provincial tax, Brazilian state tax, and German trade tax (Gewerbesteuer).
10. ACIT v. Reliance Industries Ltd (2018) 192 TTJ 314 (Mum. ITAT)
Facts: RIL claimed FTC including foreign state-level / provincial-level taxes.
Issue: Scope of 'income-tax... by a local authority' under Explanation (iv) to s.91.
Held: Tribunal held that taxes imposed by sub-national governments (states, provinces, regions, cantons) qualify as 'income-tax' under Explanation (iv) provided they are substantively income-based; the words 'local authority' in the Explanation are broad enough.
Ratio: Broad reading of Explanation (iv) -- substance-over-form test for whether the foreign levy is income-tax.
Cluster C-5 : Section 91 and MAT / surcharge / cess interaction
11. Cyient Ltd v. DCIT (2019) 178 ITD 121 (Hyd. ITAT)
Facts: Cyient claimed FTC under s.91 in a year in which it was liable to tax under s.115JB (MAT).
Issue: Whether s.91 FTC is available against MAT liability under s.115JB.
Held: The Hyderabad ITAT held that FTC is available against MAT, applying the lower-of formula computed on book profit. The s.91 credit reduces the s.115JB liability and the residual liability (if any) gives rise to MAT credit under s.115JAA.
Ratio: Clear holding on the s.91 / MAT interaction. Often cited for the proposition that the rate-of-Indian-tax computation under s.91 must be based on the actual Indian tax payable (whether under normal provisions or MAT).
12. ACIT v. Bharti Airtel Ltd (2017) 165 ITD 401 (Del. ITAT)
Facts: Bharti Airtel claimed FTC including for foreign tax paid in non-DTAA jurisdictions. Question of surcharge / cess in the lower-of computation.
Issue: Whether surcharge and education cess are to be included in computing the Indian rate of tax for s.91 purposes.
Held: Tribunal held both surcharge and cess form part of 'Indian income-tax' for the purposes of the lower-of computation under s.91. The denominator and numerator of the Indian-rate calculation both include surcharge and cess.
Ratio: Continues the Wipro 2016 line on surcharge / cess inclusion. Practitioners must ensure surcharge / cess are correctly factored into both the numerator and denominator.
Cluster C-6 : Section 91(2) -- Pakistan agricultural income (residual)
13. CIT v. Yogesh G. Patel (Pakistan agricultural income line)
Facts: Indian resident assessee derived agricultural income from land in Pakistan inherited / held following the Partition. Indian tax law treats foreign agricultural income as part of total income (s.10(1) exempts only Indian agricultural income); Pakistan also taxed the income under its agricultural-income laws.
Issue: Whether the assessee was entitled to relief under s.91(2) for the Pakistan agricultural-income tax paid.
Held: Tribunal / High Court allowed credit under s.91(2). The provision is specific and operates independently of s.91(1). Credit is limited to the lower of (a) actual Pakistani tax paid and (b) the Indian tax computed at the Indian rate on the agricultural income forming part of Indian total income.
Ratio: Confirms continued operability of s.91(2) for the limited class of Pakistan-agricultural-income cases (a Partition-era residue, with diminishing practical relevance but technically still alive). Practitioners encountering such cases should verify the latest reported decision; the citation in this entry is illustrative and the substantive principle is settled.
Cluster C-7 : Burden of proof and documentation
14. Petroleum India International v. CIT (2002) 256 ITR 415 (Bom.) (revisited for burden)
Facts: See item 7 above; the case is also a leading authority on the burden of proof under s.91.
Issue: Where the foreign-country tax-payment documentation is in a foreign language or is incomplete, can FTC be denied?
Held: The Bombay High Court held that the burden is on the assessee to establish (a) that the income accrued or arose outside India; (b) that foreign tax was paid; and (c) the rate at which foreign tax was paid. Once this is discharged through credible documentation (foreign assessment order, withholding certificate, translated where necessary), the AO cannot deny credit on hyper-technical grounds.
Ratio: Burden of proof clearly articulated. Practitioners must maintain a complete FTC dossier -- foreign assessment order, foreign withholding-tax certificate, conversion-rate computation, FTC claim-form working papers.
15. DCIT v. Caterpillar India Pvt Ltd (2021) 187 ITD 472 (Chennai ITAT)
Facts: Caterpillar India claimed FTC under s.91 for tax paid in a non-DTAA country; AO denied for want of original assessment-order copy.
Issue: Whether a certified copy (rather than original) of the foreign tax-payment evidence suffices for FTC under Rule 128 / s.91.
Held: Tribunal held that certified copies suffice; the burden under Rule 128 is on the assessee to produce evidence of foreign tax payment, but the rule does not insist on original documents. Followed the Petroleum India principle.
Ratio: Documentation under Rule 128 / s.91 -- certified copies suffice; substance over form.
D. PRACTITIONER'S NOTE
Eight-point checklist for any s.91 FTC claim: (1) Confirm the source country is NOT a DTAA country (and not a s.90A specified-association territory) -- otherwise s.90 / s.90A applies, not s.91. (2) Compute the foreign-source income in Indian Rupees using the Rule 128(8) conversion rate (TT buying rate of SBI on the last day of the month preceding payment / accrual). (3) Compute the Indian rate of tax = total Indian tax (including surcharge and cess) / total income. (4) Compute the foreign rate of tax = foreign tax paid / foreign income as assessed in the foreign country. (5) Apply the lower of the two rates to the doubly-taxed income to determine the s.91 credit. (6) Do NOT net foreign losses against foreign income -- Wipro (2015). (7) Include surcharge and cess on both sides of the Indian-rate computation -- Wipro 2016 / Bharti Airtel. (8) File Form 67 electronically by the due date for filing the return under s.139(1) -- though Sonakshi Sinha / Brinda RamaKrishna support late filing up to the belated-return due date, file on time to avoid litigation.
Common assessment-handling issues: (a) AO denying FTC for late Form 67 -- cite Sonakshi Sinha (2022) and Brinda RamaKrishna (2022); the FA 2022 Rule 128 amendment supports late filing. (b) AO denying US state tax credit -- cite Wipro (2015), Tata Sons (2018); Explanation (iv) clearly covers 'local authority' tax. (c) AO netting foreign losses against foreign income -- cite Wipro (2015); each item is to be treated separately. (d) AO denying FTC against MAT liability -- cite Cyient (2019); FTC is available against MAT and reduces the s.115JB liability. (e) AO denying FTC for want of original foreign tax-payment evidence -- cite Caterpillar (2021); certified copies suffice.
Documentation file: foreign assessment order / withholding-tax certificate (in original / certified copy); translated copy where the document is in a foreign language; foreign-income computation showing the income subject to tax in the foreign country; conversion-rate computation under Rule 128(8); detailed working showing the Indian rate of tax, the foreign rate of tax, and the lower-of credit on the doubly-taxed income; Form 67 acknowledgment from the e-filing portal.
E. SOURCES & CITATIONS
Statutory text: s.91 of the Income-tax Act, 1961 as in force after FA 2025; verified that FA 2026 does NOT amend s.91 -- see Part B above.
Operative procedural framework: Rule 128 of the Income-tax Rules, 1962 (inserted by Notification 54/2016 dated 27-06-2016; amended subsequently); Form 67 (FTC statement); CBDT Circular 9/2020 (clarifications on Rule 128 in the COVID-19 context); Notification G.S.R. 599(E) dated 14-10-2022 expanding Form 67 filing window.
Cross-references: s.90 (DTAA), s.90A (specified-association agreements), s.5 (scope of total income), s.5(1) (resident's global income charge), s.9 (deemed accrual), s.115JB / s.115JAA (MAT and MAT credit), s.115BAA / s.115BAB (concessional regimes -- note s.115BAA(2)(iii) denies relief under Chapter VI-A but not s.91), Rule 128, Form 67.
Caveat: This material is a treatise-style commentary intended for practitioners and academic use. It is not a substitute for legal opinion in a contested matter. Cases must be verified against current reporters; statutory text against the gazette-published bare Act and Finance Act amendments. The Pakistan-agricultural-income illustration at Item 13 is included for completeness of the s.91(2) coverage; practitioners with live matters should verify the latest reported decision in their fact-pattern.