Sonakshi Sinha wins Rs 29 lakh foreign tax credit dispute

Mumbai bench of Income-Tax Appellate tribunal (ITAT) has awarded Bollywood actress Sonakshi Sinha a foreign tax credit claim of Rs 29 lakh for taxes paid in the UK. IT Act says a taxpayer in India is eligible to get credit for taxes paid in another country against salary or professional income earned overseas or for overseas assets. As per reports, the aim is to prevent double taxation.

TN Entertainment Desk

Updated Sep 26, 2022, 09:24 IST

KEY HIGHLIGHTS

ITAT has awarded Bollywood actress Sonakshi Sinha a foreign tax credit
IT Act says a taxpayer in India is eligible to get credit for taxes paid in another country
Sonakshi won Rs 29 lakh
Sonakshi won Rs 29 lakh

The Mumbai bench of Income-Tax Appellate tribunal (ITAT) has awarded Bollywood actress Sonakshi Sinha a foreign tax credit claim of Rs 29 lakh for taxes paid in the UK. The development comes after a tax officer denied it for not filing a relevant form within stipulated time.

As per reports, the IT Act says a taxpayer in India is eligible to get credit for taxes paid in another country against salary or professional income earned overseas or for overseas assets. As per reports, the aim is to prevent double taxation.

According to a report in ETimes, Sinha's tax returns for 2017-18 was selected for limited scrutiny to determine the correctness and eligibility of credit claimed by her.

The tax officer had claimed she filed her returns on September 22, 2018, but filed Form 67 to claim the credit on January 20, 2020, which goes against the rule of filing form on or before the date of filing tax returns.

As per the report, Sinha was denied the credit claim because of the delay and the case reached ITAT. Last month, Central Board of Direct Taxes (CBDT) amended this rule, allowing people to file the credit form on or before the end of the relevant assessment year.

“This extension will apply to foreign tax credit claims during for the current financial year 2022-23 and beyond,” said Puneet Gupta, partner, People Advisory Services at EY-India.

Ad per Gupta, the ITAT decision will help taxpayers involved in similar litigation. Apart from Sinha, the tribunal also awarded another litigant, Anuj Bhagwati, a foreign tax credit claim of Rs 14. 22 lakh for taxes paid in the US.

Subsequently, ITAT agreed with Sinha’s submission that the form is a procedural requirement and is not a necessity.

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