Income Tax Demand - ITR-2


This is regarding my income for the AY 2020 - 21. In year 2019-20, I was non-resident alien in US and had income from both US and India. I have paid taxes in US and also in India (ITR-2). In the ITR, I showed total income including US income. While calculating total tax, I deducted the tax already paid in US (Relief u/s 90) and then paid the rest. Last month I received a notice from Income tax department demanding more money with penalty now. When checked, I found the tax paid in US was not taken into consideration.

Isn’t this a mistake on Income tax department side or my understanding in terms of calculating tax was incorrect?

@Anar_Desai, could you please look into this.

Hi @ashishb ,

Relief u/s 90 is available and claimed while filing the return of income in India. Further, taxes paid in foreign country to be claimed in India are known as Foreign Tax Credit (FTC). To claim FTC, form 67 is required to be furnished by the taxpayer.

If you have filed Form 67 and claimed Credit for taxes paid in foreign country, then you may disagree with the demand and submit response to the notice accordingly.

Hope it helps.

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Thanks @Anar_Desai for your inputs. I have submitted my response against the notice. Waiting to hear from Income Tax department.