Filing for AY 2024-25 is coming soon
Keep calm and sign up for early access to our super filing platform

A Complete Guide to Income Tax Relief for Double Taxation U/S 90 with Form 67

The Indian income tax system offers individuals and businesses an avenue to claim relief for taxes paid in foreign countries. This provision falls under Section 90 of the Income Tax Act and can be sought through the use of Form 67. In this article, we will delve into the concept of relief under Section 90, highlight the importance of Form 67, and address the question of whether it can be submitted after the deadline.

What is Income Tax Relief under Section 90?

Section 90 of the Income Tax Act of 1961 is instrumental in preventing the double taxation of income, ensuring that individuals are not liable to pay taxes in both India and a foreign country for the same earnings. This section allows Indian residents to claim relief for taxes already paid in a foreign country, provided that India has entered into a Double Taxation Avoidance Agreement (DTAA) with that particular nation.

Understanding Form 67 and Its Purpose:

Form 67, popularly known as the "Form of application for obtaining relief under Section 90 and/or Section 90A or Section 91 of the Income-tax Act, 1961," serves as the official application to seek relief under Section 90. Indian residents who have paid taxes in a foreign country and aim to avoid double taxation as per the relevant DTAA utilize this form.

Key Details to Include in Form 67:

  1. Confidential Data: Ensure to furnish your name, address, and Permanent Account Number (PAN).

  2. Tax Information: Provide details on the foreign taxes paid, including the amount and any pertinent tax identification numbers.

  3. Sections for Relief: State the specific sections under which you are seeking relief, such as Section 90, Section 90A, or Section 91.

  4. Foreign Country Attributes: Specify the foreign country with which India has a DTAA, and explain the type of income for which you are seeking relief.

Can Form 67 be Filed Late Electronically?

The Income Tax Act does not explicitly permit the late filing of Form 67. Nonetheless, based on rulings by the Income Tax Appellate Tribunal (ITAT), it can be deduced that Rule 128 of the Income Tax Rules, which mandates the submission of Form 67 before filing the income tax return to claim Foreign Tax Credit (FTC), is more of a guideline than an absolute requirement.

One such case, ITA No.412/Ahd/2023 Assessment Year: 2020-21:

Manoj KaushikPrasad Jingar Vs. The Assessing Officer, CPC Bangalore/The Income Tax Officer, Ward-5(3)(1), Ahmedabad for the Assessment Year 2020-21, highlights this interpretation. In this instance, the taxpayer submitted Form No.67 after the deadline, resulting in the Centralized Processing Center (CPC) raising a tax liability.

However, the taxpayer filed an application for rectification under Section 154 of the Income Tax Act, and a Single Bench granted the appeal, cementing the understanding that late filing of Form No.67 should not deny the taxpayer the benefits of relief under Section 90.

Recent Rulings by the Income Tax Appellate Tribunal (ITAT):

  1. The Jaipur bench of the ITAT, in the case of Suresh Kumar Doodi Vs. the Assistant Commissioner of Income Tax, ruled that a delay in submitting Form 67 should not automatically lead to the denial of Foreign Tax Credit (FTC).

  2. The Bangalore bench of the ITAT, in the case of M/s. 42 Hertz Software India Pvt. Ltd. Vs. The Assistant Commissioner of Income Tax, clarified that the delay in filing Form 67 should not result in the denial of Foreign Tax Credit (FTC).

  3. The Kolkata bench of the ITAT, in a separate case involving Sobhan Lal Gangopadhyay Vs. Assistant Director of Income Tax, held that relief under Section 90 of the Income Tax Act should not be denied solely based on a delay in filing Form 67.

Conclusion:

In conclusion, while the Income Tax Act does not explicitly address the late filing of Form 67 for claiming relief under Section 90, recent judgments by the ITAT establish that the process is of a directory nature rather than mandatory. Nevertheless, taxpayers are urged to submit Form 67 in a timely manner to avoid double taxation and ensure the smooth processing of their relief claims. Seeking guidance from tax professionals or the Income Tax Department regarding Form 67 and its filing procedures is highly recommended for a seamless experience.

 

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

Frequently Asked Questions

Double taxation relief under Section 90 of the Income Tax Act provides relief to taxpayers who are taxed on the same income in more than one country by allowing them to claim relief or exemption from one of the taxes.

Any taxpayer who is a resident of India and earns income from a foreign country with which India has entered into a Double Taxation Avoidance Agreement (DTAA) can claim relief under Section 90.

Form 67 is a document prescribed by the Income Tax Department for claiming relief under Section 90 or 90A of the Income Tax Act. It is used by taxpayers to declare their foreign income and claim relief from double taxation.

Form 67 requires details such as the taxpayer's personal information, details of income earned in the foreign country, tax paid or deducted in the foreign country, and details of the Double Taxation Avoidance Agreement (DTAA) applicable.

The DTAA between India and another country specifies rules for the taxation of various types of income to ensure that taxpayers are not taxed on the same income in both countries. It provides methods for granting relief from double taxation, such as exemption or credit methods.

Subscribe to the exclusive updates!