Refund of Tax Credit under DTAA
This query is : Resolved
29 July 2009
Hello,
Please reply it soon, its very very urgent.
I have salary income from finland for the year 2007-08. After considering the income in india. I have tax liability, now considering the tax paid in finland i have refund of taxes. My query is can i claim excess amount as refund in my income tax return.
Eg.: Total taxable income 10L.
tax for f.y. 2007-08 256470.00
total tax paid (including tds in india & tax paid in finland) Rs. 292000.00
Can i claim Rs. 35530.00 as refund of income tax in my return of income.
Please reply it soon, its very very urgent.
I have salary income from finland for the year 2007-08. After considering the income in india. I have tax liability, now considering the tax paid in finland i have refund of taxes. My query is can i claim excess amount as refund in my income tax return.
Eg.: Total taxable income 10L.
tax for f.y. 2007-08 256470.00
total tax paid (including tds in india & tax paid in finland) Rs. 292000.00
Can i claim Rs. 35530.00 as refund of income tax in my return of income.
29 July 2009
Hello Mr. Chetan,
You can definitely claim refund of Rs. 35,530/- in your return as the principle of Double Taxation relief is to benefit the assessee and to assisst the department to collect taxes. As you have already paid the required amount tax thus you can claim the excess tax deducted.
You can definitely claim refund of Rs. 35,530/- in your return as the principle of Double Taxation relief is to benefit the assessee and to assisst the department to collect taxes. As you have already paid the required amount tax thus you can claim the excess tax deducted.
29 July 2009
Please read the para 3(a) mentioned below & explain me the interpretation
"(3) In India double taxation shall be eliminated as follows:
(a) The amount of Finnish tax payable, under the laws of Finland and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of India, in respect of income which has been subjected to tax both in India and Finland shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax.
(b) For the purposes of the credit referred to in sub-paragraph (a) above, where the resident of India is a company by which surtax is payable, the credit to be allowed against the Indian tax shall be allowed in the first instance against the income-tax payable by the company in India and, as to the balance, if any, against the surtax payable by it in India :
Provided that income which in accordance with the provisions of this convention is not to be subjected to tax may be taken into account in calculating the rate of tax to be imposed."
This is from DTAA with finland.
"(3) In India double taxation shall be eliminated as follows:
(a) The amount of Finnish tax payable, under the laws of Finland and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of India, in respect of income which has been subjected to tax both in India and Finland shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax.
(b) For the purposes of the credit referred to in sub-paragraph (a) above, where the resident of India is a company by which surtax is payable, the credit to be allowed against the Indian tax shall be allowed in the first instance against the income-tax payable by the company in India and, as to the balance, if any, against the surtax payable by it in India :
Provided that income which in accordance with the provisions of this convention is not to be subjected to tax may be taken into account in calculating the rate of tax to be imposed."
This is from DTAA with finland.
29 July 2009
open
20 July 2025
Situation Summary:
You earned salary income in Finland (foreign income).
Tax was paid in Finland.
You also have tax liability in India on total income.
Total tax paid (Finland + India TDS) exceeds Indian tax liability.
You want to claim refund of excess tax paid (₹35,530).
Can you claim refund of excess tax paid under DTAA?
Yes, you can claim refund of excess tax paid, but some important points to note:
Relief under DTAA (Double Taxation Avoidance Agreement)
India allows relief from double taxation either by:
Exemption method (exempt foreign income from Indian tax), OR
Tax credit method (allowing credit for foreign tax paid).
How to claim refund?
While filing your Income Tax Return (ITR), you can claim credit for the tax paid in Finland.
Compute total tax liability on your worldwide income as per Indian Income Tax laws.
Claim credit for tax paid in Finland under Section 90 or 91 of the Income Tax Act (DTAA provisions).
If the total tax paid (India + foreign) exceeds Indian tax liability, you can claim the excess as refund.
Documentation required:
Proof of tax paid in Finland (tax payment certificate, Form 67 for foreign tax credit).
Copy of tax return filed in Finland.
Form 67 must be filed before filing your Indian ITR if you want to claim foreign tax credit.
Supporting documents like salary slips, Form 16, etc.
Process:
File your ITR correctly showing foreign income, foreign tax paid, and claim credit.
The refund of excess tax will be processed by Income Tax Department after assessment.
Refund will be credited after processing and verification.
Important Notes:
You must have filed Form 67 (declaration for claiming foreign tax credit) before the due date of filing your Indian return.
Claiming refund is subject to proper verification and matching of tax paid abroad.
The credit is limited to the amount of Indian tax on that foreign income.
Summary:
You can claim refund of ₹35,530 if it represents excess tax paid after adjusting for DTAA benefits, and you have complied with all documentation and procedural requirements.
You earned salary income in Finland (foreign income).
Tax was paid in Finland.
You also have tax liability in India on total income.
Total tax paid (Finland + India TDS) exceeds Indian tax liability.
You want to claim refund of excess tax paid (₹35,530).
Can you claim refund of excess tax paid under DTAA?
Yes, you can claim refund of excess tax paid, but some important points to note:
Relief under DTAA (Double Taxation Avoidance Agreement)
India allows relief from double taxation either by:
Exemption method (exempt foreign income from Indian tax), OR
Tax credit method (allowing credit for foreign tax paid).
How to claim refund?
While filing your Income Tax Return (ITR), you can claim credit for the tax paid in Finland.
Compute total tax liability on your worldwide income as per Indian Income Tax laws.
Claim credit for tax paid in Finland under Section 90 or 91 of the Income Tax Act (DTAA provisions).
If the total tax paid (India + foreign) exceeds Indian tax liability, you can claim the excess as refund.
Documentation required:
Proof of tax paid in Finland (tax payment certificate, Form 67 for foreign tax credit).
Copy of tax return filed in Finland.
Form 67 must be filed before filing your Indian ITR if you want to claim foreign tax credit.
Supporting documents like salary slips, Form 16, etc.
Process:
File your ITR correctly showing foreign income, foreign tax paid, and claim credit.
The refund of excess tax will be processed by Income Tax Department after assessment.
Refund will be credited after processing and verification.
Important Notes:
You must have filed Form 67 (declaration for claiming foreign tax credit) before the due date of filing your Indian return.
Claiming refund is subject to proper verification and matching of tax paid abroad.
The credit is limited to the amount of Indian tax on that foreign income.
Summary:
You can claim refund of ₹35,530 if it represents excess tax paid after adjusting for DTAA benefits, and you have complied with all documentation and procedural requirements.
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