Foreign tax Credit

Tax queries 290 views 4 replies

Vinay Katiyar

82 Points Joined October 2014

I have a query related to Foreign Tax Credit.

I have received Dividend income from the shares of MNC where i work. During payout, Indian rupee equivalent of 10,000 Rs has been deducted in Germany as withholding taxes. While filing IT return for this year, i have shown this under FA section and have taken the tax credit of 10,000 Rs. However i was not aware that I have to fill online form 67 for Foreign Tax Credit before filing return.

Now i have received a Note from IT department mentioning your return has been forwarded to AO for further assessment. There is no query or clarification sought yet. I would like to know what are the options for me.

Should I wait for query to come from IT department ?

Should I fill form 67 online and submit and later revise the return ?

Thank you

Replies (4)

Pranay Teja

49 Points Joined July 2017

Hi Vinay,

When the status reflects that Return has been forwarded to AO, it means your return is selected for Scrutiny.

You'll be receiving an Income Tax notice requesting you to submit details mentioned in the notice. It need not be necessary that scrutiny is related to foreign tax credit

Also, Form 67 is required to be filed before due date after filing your income tax return. Non filing of Form 67 makes you ineligible for Foreign Tax Credit.

However, if asked during scrutiny, please submit the requisite details of Foreign Tax credit. The AO MAY allow the credit.

Form 67 can not be filed post due date. I advise you to Prepare backup documents substantiating your Foreign Tax credit which can be submitted during Scrutiny

rama krishnan

12244 Points Joined May 2017

It's not mandatory that all ITRs forwarded to AO are selected for scrutiny. mostly all ITRs where in relief claimed under section 89 or 90 are transferred to verify the genuineness of claim. so it's better contact your jurisdictional AO with requisite documents

RAJKUMAR TG

397 Points Joined July 2018

It is Simple.
all ITR with cross border tax credits cannot be verified by cpc. cpc does not have necessary software to cross verify such Deductions.
necessarily will b transferred to AO.
AO will verify whether it is bonafide or not and then allow processing to be complete.
will take time.