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What is Timeline For Filling Form 67 under Income tax act ?
FTC would be claimed only if income tax Form-67, along with the required documents, was filling within timeline date for filing original Income-tax return in India,
As per Latest amendment Income tax taxpayer restricting ability of claiming Foreign Tax Credit for taxes paid at Foreign nation. This may generated so-many challenges for residents of India who have getting income via earned abroad & incurred foreign taxes on such income as their abroad income tax returns were not filing by then.
So many cases pending at different appellate forums such as High Courts & commissioner of income tax (Appeals) related with foreign Tax Credit’s because, there have been different law interpretations on the Foreign Tax Credit allowability in the case of belated filing of income tax Form 67. In few matter, it has also been interpretations that Foreign Tax Credit can not be denied to assessee for mere delay in filing income tax Form 67. So, Income tax assesses in this cases have been able to claim the Foreign Tax Credit even after filing the income tax Form 67 after the due date of filing the original income tax return under Income tax act.
So lastly, Central Board of Direct Taxes has amended Income tax Rule 128 to provide that income tax Form 67 can be filed till the end of AY relevant to the previous year in which the income corresponding to the Foreign Tax Credit has been offered to income tax in India, & the Tax return for such assessment year has been filed within the prescribed time line specified U/S Section 139(4) (belated return). Or U/s 139(1) (original return)
Moreover said amendment has made it clear that in cases where any income tax assessee has submitted a Income tax return U/s 139 (8A) of Income tax Act, If Income tax assessee files the Form 67 that relates to the income on or before the day the return is submitted, Then, assessee may claim Foreign Tax Credit in connection to the income reported in such updated return.Since this changes takes effect retroactively on April 1, 2022, so This Foreign Tax Credit claims filed during the current Financial Year i.e. 2022–2023, are qualified for this FTC benefit.
What are the documents to be file For Claiming Foreign Tax Credit
As per income tax Rule 128, for claiming Foreign Tax Credit, the income tax asssesse is needed to file below list of documents:
1) A certificate or statement specifying nature of income & Amount of withholding tax or paid by the income tax taxpayer:
- From Person responsible for deducting such tax, or
- From Tax authority of the country outside India, or
- Assessee signed
2) A statement of foreign income offered to tax for the PY of foreign tax paid or deducted on such income in Form No. 67.
3) appropriate payment of taxes Proof in the country outside India.
Form 67 is important documents to be file to Tax dept. in prescribed due date to claim FTC under Form 67 which have 4 four part.
· Part A contains assessee’s Name, PAN or Aadhaar, Address and AY, Foreign Tax Credit claimed, Income receipt details of the income from the country outside India,
· Part B contains details of refund of foreign tax due to carry backward of losses & disputed foreign tax.
· Verification have a self-declaration form in which the assessee has to affirm that the details provide in Part-A & Part-B is complete & accurate.
· Attachments must have a copy of the statement or certificate & proof of deduction/ payment of foreign tax
To Sum Up
The aforementioned amendment will definitely give taxpayers who receive income from abroad much-needed relief and safeguard them from completely losing the benefits of the Foreign Tax Credit. Since it has eliminated any potential for misinterpretation or ambiguity regarding the deadline for filing Form 67 and the credit's eligibility, which was brought on by various legal precedents over the years, it will also reduce tax disputes on FTCs.