In a landmark judgment, the Income Tax Appellate Tribunal (ITAT) Mumbai has provided crucial clarity for NRIs and returning Indians holding foreign retirement benefit accounts such as IRA, Roth IRA, and 401(k) in the USA.

The Tribunal ruled that once a taxpayer files Form 10EE under Section 89A of the Income Tax Act, 1961, the option continues automatically for all subsequent assessment years. There is no need to re-file Form 10EE every year.

This decision provides huge relief to taxpayers managing foreign pension or retirement accounts while ensuring no double taxation under Indian tax laws.

Case Overview

Case Title: Jignesh Naresh Jariwala vs Deputy Director of Income Tax (CPC Bengaluru)
Tribunal: ITAT Mumbai, Bench “F”
Members: Shri Narendra Kumar Billaiya (AM) & Shri Anikesh Banerjee (JM)
Assessment Year: 2023–24

Background of the Case

The assessee, Mr. Jignesh Naresh Jariwala, an employee of LTIMindtree, filed his income tax return declaring a total income of ₹1.20 crore for AY 2023–24.

He maintained multiple foreign retirement benefit accounts in the USA, including:

• Vanguard SEP-IRA
• Vanguard Traditional IRA
• Avenir 401(k)
• Fidelity Roth IRA

He claimed a tax relief under Section 89A of ₹4,34,659 on income accrued in these accounts, which are notified foreign retirement accounts under Indian tax law.

However, the Centralized Processing Centre (CPC), Bengaluru denied the claim while processing his return under Section 143(1) — stating that Form 10EE was not filed for the relevant year.

Key Legal Question

Is it mandatory to file Form 10EE every year to claim Section 89A relief on income from foreign retirement accounts such as IRA or 401(k)?

Assessee’s Argument

The assessee contended that:

• Form 10EE was already filed in AY 2022–23 to exercise the option under Rule 21AAA(1) of the Income Tax Rules, 1962.
• As per Rule 21AAA(6), once this option is exercised, it automatically applies to all subsequent years.
• Therefore, refiling Form 10EE every year is not required.
• The denial of relief u/s 89A was a procedural error, not a substantive default.

Tribunal’s Findings

After reviewing the relevant provisions of Rule 21AAA(1), (4), and (6), the ITAT Mumbai observed:

• Once the taxpayer files Form 10EE for a specified retirement account, the option continues automatically for all future years.
• There is no legal requirement to re-file Form 10EE each year.
• Denying the benefit under Section 89A merely due to non-filing of the form again is invalid and contrary to the law.
• Procedural lapses cannot override substantive tax relief granted by statute.

ITAT’s Decision

The Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to allow relief under Section 89A amounting to ₹4,34,659.

Final Verdict: Once Form 10EE is filed, the option under Section 89A continues automatically for subsequent assessment years. No re-filing required.

Why This Ruling Matters for NRIs and Returning Indians

This judgment provides major relief to:

• NRIs returning to India who hold foreign retirement accounts like IRA, Roth IRA, or 401(k).
• Global employees with employer-contributed U.S. retirement plans.
• Tax residents in India avoiding double taxation of retirement savings.

Key Takeaways:

• Form 10EE is a one-time filing when opting for Section 89A relief.
• The benefit continues automatically in future years.
• Section 89A prevents double taxation of income from foreign retirement accounts.
• Applies to specified countries such as the USA, UK, and Canada.

Understanding Section 89A and Form 10EE

Section 89A of the Income Tax Act was introduced to remove double taxation for Indian residents having foreign retirement benefit accounts.

Without this provision, taxpayers could face taxation both abroad and in India on the same income.

Form 10EE is used to opt for deferred taxation — income is taxed only when withdrawn in the foreign country.

As per Rule 21AAA(6), once exercised, this option remains valid for all subsequent years unless the individual becomes non-resident again.

Expert Insight – Dinesh Aarjav & Associates

At Dinesh Aarjav & Associates, we specialize in cross-border taxation, NRI tax planning, and DTAA compliance across India, the USA, UK, Canada, UAE, and Australia.

Our team assists:

• NRIs and returning Indians in reporting IRA, Roth IRA, 401(k), and pension accounts.
• With Form 10EE filing, Section 89A advisory, and foreign tax credit claims.

To ensure no double taxation and complete Indian tax compliance.

If you have foreign retirement accounts or overseas investments, consult our experts today to ensure proper compliance and optimum tax efficiency.

Conclusion

The ITAT Mumbai ruling in Jignesh Naresh Jariwala’s case settles a long-standing ambiguity:

Once Form 10EE is filed, Section 89A relief automatically applies each year — giving NRIs and NRI returning to India the certainty and ease they deserve.

This judgment reinforces the government’s intention to simplify cross-border tax compliance and eliminate double taxation for globally mobile professionals.