Agreement with foreign countries or specified territories and adoption by Central Government of agreement between specified associations for double taxation relief

The Central Government may enter into an agreement with the Government of— (a) any other country;or (b) any specified territory, for the purposes mentioned in sub-section (3), and may, by notification, make such provisions as necessary for implementing the agreement.

Any specified association in India may enter into an agreement with any specified association in the specified territory for the purposes mentioned in sub-section (3) and the Central Government may, by notification, make such provisions as may be necessary for adopting and implementing such agreement.

The agreement mentioned in sub-section (1) or (2) may be entered for— (a) the granting of relief in respect of— (i) income on which income-tax has been paid both under this Act and income-tax in that country or specified territory, as the case may be; or (ii) income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment; or (b) the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory);