Navigating Foreign Tax Credit Claims in India: A Comprehensive Guide

Understanding Double Taxation: Residents in India may face double taxation on global income. DTAA prevents this by allowing Foreign Tax Credit (FTC) claims. FTC Essentials: Residents can claim FTC for taxes paid abroad, subject to DTAA provisions. It ensures fair taxation, regardless of income source or location.

Section 90 & 91: Section 90 addresses DTAA situations, while Section 91 applies when no DTAA exists, providing unilateral relief. Rule 128 Overview: Rule 128 and Form 67 simplify FTC claiming process. Eligibility, timing, exclusions, and limitations are defined.

Document Requirements: Furnish documents like tax certificates, acknowledgments, and Form 67 for successful FTC claims. Calculating FTC: Convert foreign income, claim TDS credit, obtain TRC, and report foreign income accurately to claim relief.

Schedule FSI Details: Report foreign income and taxes paid in Schedule FSI of the Income Tax Return for correct tax relief calculation. Ensuring Compliance: Follow steps diligently to claim FTC, ensuring compliance with tax laws and avoiding double taxation.