Releif u/s 90 if excess tds is deducted by foreigner

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2016 Sir,

I am resident in india and provided translation services in Japan. Japan resident deducted my TDS @ 10%/20% under article 12 of DTA but article 12 excludes independent services by individual. Now how can I claim releif under section 90 of I.T act. As A.O is saying that you were falling under article 14 rather than 12 so tds was not deductible. As per article 23, india will give credit if tds was deductible. Please suggest any remedy alongwith case law.
Its urgent!!!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 February 2016 Ask your Japan resident claim refund of the wrongly paid TDS and remit it to you.

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2016 Its not easy now as it was deducted in 2007. Any other option?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Got it — here’s a breakdown and possible remedies for your situation regarding excess TDS deducted by a foreign payer (Japan resident) and claiming relief under Section 90 of the Income Tax Act:

Your Scenario Recap:
You, an Indian resident, provided translation services in Japan.
Japan resident deducted TDS at 10% or 20% under Article 12 (Royalties and Fees for Technical Services) of the DTAA.
But Article 12 excludes independent personal services by individuals.
You argue your income should fall under Article 14 (Independent Personal Services).
The AO is saying TDS was not deductible as per Article 12.
Article 23 (Other income) allows India to give credit only if tax was deductible.
You want to claim relief under Section 90 of the Income Tax Act for excess TDS deducted in Japan.
Key Points & Remedies:
1. Understand the Applicable DTAA Article

Article 12 generally applies to royalties and fees for technical services, excluding independent personal services by individuals.
Article 14 (Independent Personal Services) is the correct article for your translation services as a freelancer/individual.
Hence, withholding tax under Article 12 was wrongly deducted by Japan.
2. Foreign Tax Credit under Section 90

Section 90 allows credit for foreign tax deducted in accordance with DTAA.
The credit is allowed only if tax was correctly deducted under the DTAA provisions.
Since Japan deducted tax incorrectly, India will not allow credit for this excess withholding.
So, you need to recover tax in Japan first.
3. Claim Refund in Japan

Primary remedy: Request the payer (Japan resident) or the Japanese tax authority to refund excess TDS paid wrongly under Article 12.
This may be challenging given time elapsed (2007), but it is the formal remedy.
4. File a Refund Claim in India

If Japan tax cannot be recovered, file for refund of excess tax paid in India by showing that the foreign tax was not deductible under DTAA.
You can explain that Japanese withholding was wrongly applied; hence, Indian income tax should not allow credit.
However, this might not fully solve your problem, because Indian tax law relies on foreign tax credit mechanism.
5. Approach Mutual Agreement Procedure (MAP)

Under Article 25 of DTAA, you can approach the competent authorities of India and Japan to resolve disputes like this.
This process is for avoiding double taxation and can help clarify applicability of Articles 12 vs 14.
MAP can be initiated through the Indian tax authorities.
6. Legal Precedents & Case Laws

Look for cases where courts or authorities have ruled on independent personal services excluded from fees for technical services.
For example, Supreme Court judgment in CIT v. R. D. Aggarwal (1995) and CIT v. GlaxoSmithKline Asia (2011) may provide some direction on independent services vs technical services.

Final Suggestion:
Consult a tax treaty expert or international tax lawyer for MAP application.
Meanwhile, request the Japanese payer to claim refund (even if late, it’s worth trying).
Maintain all correspondence and documents as evidence for Indian tax authorities.

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