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Relief under Section 89A

Whether you can defer Indian tax on income from a notified foreign retirement account until it is taxed in that country.

Your details

Notified countries: USA, UK, Canada.

Your answer

₹ —

Still needed: whether you are a resident this year, whether you hold a specified foreign retirement account, your status when the account was opened, whether the account had income this year.

  • The figure, and how it compares where there is a choice
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For guidance only — not tax advice. Every figure is drawn from BharatX’s verified rule book, with the sections and rules shown alongside it.

Relief under Section 89A: how it works and FAQs

FY 2025-26 (Income-tax Act 1961) and FY 2026-27 (Income-tax Act 2025) · Updated

How it works

Section 89A lets a resident defer Indian tax on income from a notified foreign retirement account (such as a US 401(k) or an UK/Canada pension account) from the year it accrues to the year it is withdrawn, so it is not taxed twice.

Section 89A lets a resident defer Indian tax on income from a notified foreign retirement account (such as a US 401(k) or an UK/Canada pension account) from the year it accrues to the year it is withdrawn, so it is not taxed twice. This is an eligibility check: four conditions must all be met.

  1. You must be a resident of India in the year you claim the relief (s.89A).
  2. The account must be a “specified account” maintained in a notified country (the USA, UK and Canada are notified).
  3. You must have opened the account while you were a non-resident of India (and a resident of that country).
  4. The income must be the type India otherwise taxes on accrual each year, rather than only on withdrawal.
  5. If all four hold you are eligible and file Form 10-EE; if any one fails, the relief is not available.

Worked example

Eligible — the person can defer Indian tax on that income to the year of withdrawal by filing Form 10-EE.

A resident individual holds a US 401(k). It is a specified account in a notified country (USA), it was opened while they were a non-resident, and India would otherwise tax its yearly accruals.

  1. Resident this year — yes.
  2. Specified account in a notified country — yes.
  3. Opened while a non-resident — yes.
  4. Income otherwise taxed on accrual — yes.

Eligible — the person can defer Indian tax on that income to the year of withdrawal by filing Form 10-EE.

Frequently asked questions

Which countries are notified for section 89A?

The United States, the United Kingdom and Canada have been notified, so retirement accounts maintained there can qualify.

What form do I file?

Form 10-EE, on or before the due date for the return, for the first year you choose section 89A. The option, once made, applies to all later years and cannot be withdrawn.

Does it reduce my tax, or only defer it?

It defers it. The income is taxed in India in the year you withdraw it instead of each year it accrues, which helps you match the foreign country’s tax treatment and claim credit.

What if I become a non-resident later?

If you stop being a resident, the income already deferred may be taxed; the relief is designed for the years you are an Indian resident.

Is this the same as section 89?

No. Section 89 gives relief on salary arrears received in a lump sum; section 89A defers tax on foreign retirement-account income — different situations.

Every figure the calculator shows lists the sections it relies on under “Legal basis”. For guidance only — not tax advice.