Is updated ITR more economical than FAST-DS for past foreign income
Harshal Bhuta, partner at P. R. Bhuta & Co., CAs, said that under ITR-U, foreign tax credit (FTC) is available if the taxpayer has already paid tax in a foreign country. FTC lets you adjust foreign taxes against your Indian tax liability directly while filing your ITR. In the example above, a 25% tax would have been withheld in the US. So, the taxpayer has to essentially pay 5% tax on ₹10 lakh, which is ₹50,000. After adding interest and 50% penalty, the total tax liability comes to about ₹1 lakh.
