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All Details About New Foreign Tax Credit Rule with Benefits

All About New Foreign Tax Credit Rule

What is the New Foreign Tax Credit (FTC)?

Furnishing relief to the assessee for the case of claiming the Foreign Tax Credit (FTC), the Central Board of Direct Taxes (CBDT) has changed Rules 128 of the Income Tax Rules 1962.

Before the revision, the assessee can exclusively avail of FTC, via furnishing Form 67 including the required documents within the deadline of the ITR filing. There has been an amendment to the complaints.

An Indian resident under rule 128 permits the claim of credit toward the amount that he or she would have filed as a tax in a foreign country.

New Foreign Tax Credit (FTC) Rule Benefits for Indian Residents

Below are the five points that an assessee must note down for the new FTC rule:

Documents Required to Claim FTC as Per New Rule

Documents needed for furnishing of claiming FTC, assessee needs to furnish the following documents:-

No FTC is Allowed on These Foreign Taxes

The latest rule Wef 1st April 2022. Thus the assessee who is required to claim FTC for the FY2021-22 could now furnish Form 67 and assist with the documents till March 2023.

The Ministry of Finance circulated the new overseas investment rules and regulations in a bid to improve the functioning of the business.

The Ministry of Finance articulated in a statement on 22 August 2022, “Given the evolving needs of businesses in India, in an increasingly integrated global market, there is a need for Indian corporates to be part of the global value chain. The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics. Clarity on Overseas Direct Investment and Overseas Portfolio Investment has been brought in and various overseas investment-related transactions that were earlier under approval route are now under the automatic route,”

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