Foreign tax credit refund

Hi,

Can a Private Limited Company carry forward its Foreign Tax Credit (FTC)? If not, what is the possible solution in the following scenario: The company has Foreign Tax Credit (FTC) of Rs 47,00,000, out of which Rs 17,00,000 has already been used to reduce the tax liability. However, I am unable to claim the refund for the remaining Rs 30,00,000. Kindly advise on how to resolve this issue.

Replies (1)

As per Indian tax laws, a Private Limited Company cannot carry forward Foreign Tax Credit (FTC) to subsequent years. However, there are possible solutions to utilize the unclaimed FTC: 1. Carry back: If the company has unabsorbed tax losses or unutilized tax credits in the previous year, they can be carried back to the previous year and adjusted against the tax liability. 2. Merge with another company: If the company merges with another company, the unutilized FTC can be carried forward and utilized by the merged company. 3. Amalgamation: Similar to merger, if the company undergoes amalgamation, the unutilized FTC can be carried forward. 4. File a refund claim: If the company has already used Rs 17,00,000 and is unable to claim a refund for the remaining Rs 30,00,000, they can file a refund claim with the tax authorities. 5. Seek professional help: Consult a tax professional or chartered accountant to explore other possible solutions and ensure compliance with tax laws. Please note that tax laws are subject to change, and it's essential to consult a tax professional for personalized advice.

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