Vivek Jalan
Quick Summary
It is high time that necessary amendments should be made in the Income Tax Act/Rules to incorporate the process of claiming the tax credit, where the foreign tax credit certificates are received by an assesses even after the end of the assessment year. This would avoid hardship for the assesses and
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FAQ :
Recent tribunal decisions, such as in the case of Anuj Bhagwati vs DCIT, have held that filing Form 67 is directory, not mandatory. This means that while it's advisable to file it, a delay should not necessarily preclude an assessee from claiming foreign tax credit.
As per Rule 128, Form 67 needs to be filed along with proof of foreign tax payment on or before the end of the assessment year relevant to the previous year in which the FTC is claimed.
If you receive details of foreign tax payments only after the assessment year ends, the prescribed timeline for filing Form 67 can act as a deterrent. However, tribunal rulings suggest that a delay in filing Form 67 due to such circumstances may not prevent you from claiming the FTC.
Yes, in cases where it's realised that Form 67 was not filed along with the return of income and is filed subsequently, the delay should not be considered fatal to the claim for foreign tax credit, according to tribunal decisions.
No, the Act specifies that rules cannot override the Act. Therefore, if the Act does not mandate Form 67 for FTC, the rules requiring its timely filing may not be strictly binding.
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