Navigating Foreign Income Reporting in Indian Tax Returns
Introduction:
Investors holding foreign assets face dual tax obligations, requiring careful reporting in their Indian tax returns.
Schedule FSI (Foreign Source Income):
Mandated for resident Indians earning income from abroad, excluding losses.
Schedule TR (Tax Relief):
Allows residents to claim credit for taxes paid abroad to avoid double taxation.
Liability to File:
Resident individuals with foreign income must report under Schedule FSI and disclose relief details in Schedule TR.
Illustrative Example:
Ms. Diya reports dividends from foreign shares in Schedule FSI and claims tax credit using Form 67 in Schedule TR.
Relevant Reporting Period:
Taxpayers should report foreign incomes earned during the financial year (April 1st to March 31st).
Key Filing Guidelines:
Ensure accuracy in income and taxes, disclose foreign assets in Schedule FA, categorize incomes correctly, and enter DTAA article numbers accurately.