Introduction:
In today’s globalized world, where businesses transcend borders and individuals relocate for work and investment opportunities, the issue of double taxation has become increasingly relevant.
To address this challenge, countries often enter into Double Taxation Avoidance Agreements (DTAA) to provide relief to taxpayers and promote international trade and investment. In this blog, we will delve into the concept of DTAA and how to claim relief in taxes in such cases as per the Income Tax Act, 1961, and understand its significance in the terms of income tax.
A Double Taxation Avoidance Agreement (DTAA) is a bilateral or multilateral agreement between two or more countries aimed at eliminating the double taxation of income or gains arising in one country and paid to residents of another country.
Form 67 under the Income Tax Act, 1961, is a declaration to be made by an individual who is eligible to claim the benefits of sections 90 and 90A of the Income Tax Act, relating to relief or deduction of tax paid in a foreign country or specified territory. These sections deal with the relief available to taxpayers who are subject to double taxation on their income earned from foreign sources. Section 91 delas with provisions of relief where no DTAA exists.
Form 67:
To obtain relief under section 90/90A/91 of the Income Tax Act,1961 , Indian residents have to make an application in form 67 of the income tax. Indian residents paying taxes in foreign country willing to avoid double taxation as per the DTAA provisions make application in the form 67.
Let us understand step by step which data needs to filed in filing form 67:
After loggin in income tax portal, one needs to enter details in form 67 for relevant assessment year.
After selecting assessment year, you need to enter data in four parts which looks like below:
Part A includes basic confidential information like name, address, PAN and assessment year. Details of relief to be claimed under section 90/90A/91 is to be entered in the given format:
Under Part B additional information related to foreign tax credit or any refund is to be given, if any.
After completion of Part A and B, a verification page appears where name of the person filing the form alongwith date and place has to be entered.
On the final step, a page containing attachment option is to be filled, where the person has to submit the statement or proof of payment of tax in foreign country has to be submitted.
Upon completion of all the steps, form 67 is submitted and an acknowledgement is generated for the reference.
Conclusion:
Form 67 is an important declaration to be made by the person willing to obtain relief of tax where provisions of DTAA applies. As per certain recent judgements, tribunals have allowed late filings of form 67 even though income tax does not explicitly allow late filing of form 67. Relief under Section90/90A/91 are important provisions where a person earning in a foreign country can have relief in tax in his source or resident country according to provisions of income tax.
About Author:
CA Chinmay Shirish Agate
Chinmay Agate is a Practicing Chartered Accountant having 4+ years of experience and expertise in the field of Direct Taxation and Auditing compliances. In the past, he worked in various CA firms and comes with wide industry experience from services, retail to manufacturing to trading where he has handled various complex assignments. He has keen interest in Forex and Derivative knowledge as well as fundamental analysis.