Specifying tax refund for dtaa tax relief claimed previously

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Web User (Querist)
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18 May 2019 Dear Experts,

Looking out for a little help. I am filing my Income Tax Return on my own using the ITR2 Java Utility provided by the Income Tax Department.

I am an NRI from FY2018-2019.

In FY2017-2018 I had paid tax in a foreign country for INR 40,000 and claimed INR 20,000 as Tax Relief under DTAA (using Schedule FSI & TR). However I got a proportional tax refund of INR 30,000 in the foreign country.

Which means, at the end I have paid a tax of INR 40,000 - INR 30,000 = INR 10,000 in the foreign country.

For FY2018-19, in Schedule TR, I came across Section 4/4a/4b under Summary of tax relief claimed for taxes paid outside India.

%proportion of Indian Tax Rate is higher than % of the foreign tax (as I had worked only for few days in FY2017-2018).

I believe I have correctly selected "Yes" for "Whether any tax paid outside India, on which tax relief was allowed in India, has been refunded/credited by the foreign tax authority during the year? If yes, provide the details below"

My Queries

1) What amount has to be specified for 4A Amount of tax refunded?

Do I have to specify INR 30,000 which is the proportional amount of tax refunded to me in the foreign country?
or
Do I have to specify INR 10,000? As this is the amount paid as tax in the foreign country and it is lower than calculated(proportional) Income Tax Payable in India which is INR 20,000.

2) If i enter say INR 10,000 in Schedule TR 4A, and then "Re-calculate" my income tax, I do not see my tax payable increase by INR 10,000 in Part B - TII Section 16 (Amount payable (Enter if 14 is greater than 15e, else enter 0)).

Am I not supposed to pay say INR 10,000 in India? Or is there an issue with the Income Tax ITR 2 Java Utility?

3) How do I pay this amount of say INR 10,000 as tax? If i pay it and update the challan details in my tax return, utility will then calculate it as a refund of INR 10,000. Eventually it will get refunded to me again!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 May 2019 1 You have to specify INR 30,000 which is the proportional amount of tax refunded to you in the foreign country.

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