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Filing of ITR in case of remittances received from foreign business

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Harshad

Student

33 Points Posted on 25 May 2021

My query is A person who is an ordinary resident as per Income tax act is receiving income from foreign business which exceeds the taxable limit, in NRE account maintained in India. Can anyone please guide how i need to show this in ITR and which ITR i need to file.

Thank you in advance :)

Replies (6)

Quick Summary

This discussion clarifies how an ordinary resident in India should file their Income Tax Return (ITR) when receiving income from a foreign business. It confirms that ITR-3 is the correct form to use. The advice explains that while foreign business income is taxable in India, relief can be claimed if tax has already been paid in the foreign country, typically using the exemption method as per Double Taxation Avoidance Agreements (DTAA).

veerendar singh

tax consultant

1829 Points Posted on 25 May 2021

It is definitely itr3 which you will file.

such foreign income will be taxable again in india. if tax is paid in foreign country then claim relief under 90/90A/91

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 25 May 2021

Agree

veerendar singh

tax consultant

1829 Points Posted on 26 May 2021

Very well

Harshad

Student

33 Points Posted on 26 May 2021

Dear Veerendar,

DTAA between both the countries has following provision:

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. (in our case it will be taxed in Foreign country)

My question is still i have to consider it in my ITR and if yes then whether relief will be granted under Exemption method or tax relief method?

veerendar singh

tax consultant

1829 Points Posted on 26 May 2021

This para clearly indicates that your foreign business income will be subject to tax in a single country. hence the foreign country will only tax that income.

hence in india you can take relief under exemption method.