Mrs Prasad from Tucson, Arizona, USA, had paid income tax in the USA and wanted to claim its benefit under the India-USA DTAA in India. However, she made a critical error by not filing Form 67. Thus, the Income Tax Department denied her the foreign tax credit (FTC) for tax paid in the USA and imposed Rs 30 lakh income tax demand on her.
For those unfamiliar with the rules: if you pay tax in a foreign country that has a Double Taxation Avoidance Agreement (DTAA), then you need to file Form 67 when you submit your ITR. This form allows you to claim the credit in India for the foreign taxes you paid.
