Rule 74 lets a specified person choose to include income accrued in a retirement benefit account in a notified country in the tax year in which it is taxed on withdrawal there, by filing Form No. 40, and sets what happens on becoming a non-resident.
74
Rules 2026 · Rule 74
Taxation of income from retirement benefit account maintained in a notified country
Rules 60-76
The option (sub-rule 1). A specified person with income accrued in a specified account during a tax year may, at option, include it in the total income of the tax year in which it is taxed on withdrawal or redemption in the notified country.
What is left out (sub-rule 2). In that year the total income does not include income that (a) was already included in total income in an earlier year of accrual and tax paid, or (b) was not taxable in India in the year of accrual because the person was a non-resident or not ordinarily resident (section 6(13)), or because of a Double Taxation Avoidance Agreement. Foreign tax on such income is ignored for the foreign tax credit under rule 76.
How to exercise it (sub-rules 3 and 5). For all the specified accounts the person maintains, in Form No. 40, on or before the due date under section 263(1)(c). Once exercised it applies to all subsequent tax years and cannot be withdrawn.
Becoming a non-resident (sub-rule 4). If the person becomes a non-resident in a later tax year (the "relevant tax year"), the option is deemed never to have been exercised from that year, and the income accrued from the first option year to the year before the relevant tax year is taxable in that preceding year, with the tax paid by the due date for the return of the relevant tax year.
Definitions (sub-rule 6). "Notified country", "specified account" and "specified person" are as in section 158(2).