Maximize Your Savings: Exploring Section 89A Tax Relief on Income from Foreign Retirement Funds

In 2021, the Finance Act brought in Section 89A to the Income Tax Act, 1961 , facilitating tax relief for Indian residents with income from overseas retirement funds like 401k or IRA. Previously, these accounts faced inconsistencies in tax timing: they were taxed abroad upon withdrawal but taxed on an accrual basis in India, complicating claims for foreign tax credit and Double Taxation Avoidance Agreement (DTAA) benefits for NRIs relocating to India post-retirement.