If India has an agreement with a foreign country to recover income tax, the foreign government can send a certificate to the Income Tax Board. The Board forwards it to the appropriate Tax Recovery Officer, who collects the tax from the resident or from property in India, just as under section 413, and remits the amount (minus recovery expenses) back to the Board.
If a taxpayer who owes tax is a resident of, or holds property in, a treaty country, the Tax Recovery Officer can also issue a certificate under section 413 and the Board will act according to the treaty terms, including recovering penalties, interest, and other sums.
📜 Official text of the section +
418. (1) Where an agreement is entered into by the Central Government with the
Government of any country outside India for recovery of income-tax under
this Act and the corresponding law in force in that country and the Government
of that country or any authority under that Government which is specified in this
behalf in such agreement sends to the Board a certificate for the recovery of any
tax due under such corresponding law from—
( a) a resident; or
( b) a person having any property in India,
the Board may forward such certificate to any Tax Recovery Officer having juris -
diction over the resident, or within whose jurisdiction such property is situated and
thereupon such Tax Recovery Officer shall—
( i) proceed to recover the amount specified in the certificate in the manner
in which he would proceed to recover the amount specified in a certificate
drawn up by him under section 413; and
( ii) remit any sum so recovered by him to the Board after deducting his
expenses in connection with the recovery proceedings.
(2) Where an assessee who is in default or is deemed to be in default in making a
payment of tax,—
( a) is a resident of a country being a country with which the Central
Government has entered into an agreement for the recovery of income-
tax under this Act and the corresponding law in force in that country; or
( b) has any property in the country referred to in clause (a),
then, Tax Recovery Officer may forward to the Board a certificate drawn up by
him under section 413 and the Board may take such action thereon as it may deem
appropriate having regard to the terms of the agreement with such country.
Recovery of penalties, fine, interest and other sums.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.