HAVE YOU PAID TAX ABROAD? REMEMBER TO SUBMIT FORM 67 WITH PROOFS ASAP!

Form 67 and proof of payment must be submitted at the earliest opportunity if you have paid tax abroad. If you fail to do so, both your tax return and refund could be delayed. Taxes paid in any country or specified territory outside India can be credited to the assessee.?

A credit is allowed for foreign income tax paid in the year the assessee offers the income for taxation. The credit is the lesser of the tax due on such income under the Income-tax Act and foreign tax paid on the income.?

While calculating the Foreign Tax Credit (FTC), excess foreign tax shall be ignored if it exceeds the amount of tax payable under the DTAA. DTAA, or Double Taxation Avoidance Agreement, is a tax treaty that is signed between India and another country (or any two/multiple countries) to avoid double taxation.

Specifically, Rule 128 of the Income Tax Rules, 1962 provides norms for granting foreign tax credits to taxpayers.?

According to said rule, in order to claim foreign tax credits, the assessee must provide a statement of income he or she has offered to tax for the previous year and any foreign taxes he/she has paid or deducted. The statement must be filed electronically in Form No. 67 on or before the due date for filing his original income tax return under section 139(1).

Rule 128 has been amended by the Central Board of Direct Taxes (CBDT) so that Form 67 can be filed even if the return of income for such assessment year was filed within the time specified under Section 139(1) or Section 139(4)).

Form 67 (relating to income included in an updated return) must be filed on or before the date on which the updated return was filed by the assessee under Section 139 (8A).

FTC claims furnished during the financial year 2022-2023 will be affected by the amendment, which takes effect on 01-04-2022.