Home |Tax returns filing | A person has INR 16 lakh as his total income in Germany. According to RBI rates, INR 4 lakh is already paid in taxes in Germany, income of INR 2.5 lakh in India. Which ITR will he need to file—ITR 1 or ITR 2? Will Form 67 also need to be submitted along with it? How will the tax be computed? Can the person get complete relief of INR 4 lakh as per Section 91A or will he get relief only under Section 90?

A person has INR 16 lakh as his total income in Germany. According to RBI rates, INR 4 lakh is already paid in taxes in Germany, income of INR 2.5 lakh in India. Which ITR will he need to file—ITR 1 or ITR 2? Will Form 67 also need to be submitted along with it? How will the tax be computed? Can the person get complete relief of INR 4 lakh as per Section 91A or will he get relief only under Section 90?

Yamini
Answered on February 07,2020

Which ITR form you should file depends upon the sources of income you have earned during the financial year. Assuming you do not have any professional or business income, you must file ITR-2 since you have foreign income. Section 90 talks about claiming of Foreign Tax Credit (FTC) in a case where India has entered into a Double Taxation Avoidance Agreement (DTAA) with another country and such DTAA provides for claiming of such FTC. Section 91 deals with claiming of FTC in scenarios where India has not entered into a DTAA with the country where the income arises for a taxpayer.India has entered into a DTAA with Germany, so you can claim relief as per Section 90.

To claim FTC, you must submit a statement of foreign income and tax deducted on such income, in Form 67. If you are filing your return online, you would have to submit this form online. Besides this, a statement has to be obtained from the tax authority of Germany certifying the nature of income received in Germany and the tax deducted thereon. Proof of payment of taxes abroad must also be furnished. Note that all these details must be furnished before the due date of filing return of income.

Related Questions