Imagine you earned money from a country like Brazil or Nigeria — countries India has no tax treaty (DTAA) with under Section 90. Both countries tax your income. That's double taxation, and Section 91 is your rescue: it gives you unilateral relief (India acting alone, without a treaty) so you don't pay full tax twice.
Here's how the relief works for a resident individual: You get a deduction from your Indian tax equal to the doubly taxed income × lower of (Indian rate of tax OR foreign country's rate of tax). If both rates are equal, the Indian rate is used. The key formula:
- Indian rate of tax = Indian income-tax (after Act reliefs, before Chapter relief) ÷ Total income
- Rate of foreign country = Taxes actually paid abroad (after foreign reliefs, before double-tax relief) ÷ Income assessed abroad
The relief is a deduction from tax payable, not from income — so it directly reduces your tax bill. You must prove that you actually paid tax in the foreign country (keep certificates, bank records).
Sub-section (2) has a special Pakistan agricultural income rule — you get the lower of actual tax paid in Pakistan or the amount calculated at the Indian rate. Practically, this is rarely tested but good to know exists.
Sub-section (3) extends this relief to a non-resident partner in a registered Indian firm — if the firm earns income from a non-treaty country and the NR partner's share includes that income, and the partner has paid tax on it abroad, they too can claim Section 91 relief. This is a favourite exam twist.
Remember: Section 91 applies only when there is NO DTAA with that country. If a DTAA exists, you go to Section 90 or 90A instead. This distinction is asked frequently as a 4-mark question.
Example 1 — Resident Individual (Sub-section 1)
Mr. Arvind Sharma is a resident in India for PY 2025-26. His income details:
- Indian income: ₹12,00,000
- Income from Country Y (no DTAA with India): ₹4,00,000
- Total income: ₹16,00,000
- Indian income-tax on ₹16,00,000 (after slab rebates under the Act): ₹2,40,000
- Tax paid in Country Y on ₹4,00,000: ₹80,000
Step 1 — Calculate Indian rate of tax:
₹2,40,000 ÷ ₹16,00,000 = 15%
Step 2 — Calculate Country Y rate of tax:
₹80,000 ÷ ₹4,00,000 = 20%
Step 3 — Lower rate:
Lower of 15% and 20% = 15% (Indian rate)
Step 4 — Section 91 Relief:
₹4,00,000 × 15% = ₹60,000
Step 5 — Net Indian Tax Payable:
₹2,40,000 − ₹60,000 = ₹1,80,000
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Example 2 — Non-Resident Partner (Sub-section 3)
Rajesh & Co. is a registered Indian firm (resident). Its income includes ₹3,00,000 earned in Country Z (no DTAA). Mr. Kenji (NR partner, 30% share) receives ₹90,000 as his share of this foreign income. Mr. Kenji paid tax in Country Z on this ₹90,000 at 25% = ₹22,500.
Mr. Kenji's Indian tax on total assessed income: ₹60,000; total income: ₹3,00,000 → Indian rate = 20%
Relief = ₹90,000 × lower of (20%, 25%) = ₹90,000 × 20% = ₹18,000
Net Indian tax for Mr. Kenji: ₹60,000 − ₹18,000 = ₹42,000
📖 Bare Act text — Section 91, Income Tax Act 1961
(click to expand)
(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 section 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.
(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.
(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.—In this section,—
(i) the expression "Indian income-tax" means income-tax charged in accordance with the provisions of this Act;
(ii) the expression "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) the expression "rate of tax of the said country" means income-tax and super-tax actually paid in the said country in accordance with the corresponding laws in force in the said 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) the expression "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.