How to Apply for a Tax Credit on a Foreign Citizen's Income

Have you worked abroad during the financial year and earned? Other taxes may be deducted outside India in that foreign income. If you are a resident of India in terms of income tax laws, income earned anywhere in the world is taxable in India. But how should this income be included in the income tax return? Let's find out.

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1. Have you worked abroad during the financial year and earned?

Convert foreign earned income from India into Indian currency - convert your foreign exchange earnings to Indian Rupee by using the telegraphic transfer buying rate (TTBR) on the last day of the month before the monthly payment amount. For example, to convert your December 2020 earnings to income, use the TTBR for the appropriate currency for November 2020 and convert your income into Indian Rupees.

Frequently Asked Questions

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But how should this income be included in the income tax return?

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If TDS is deducted from your income, you are allowed to take credit for those taxes. For this purpose, reference should be made to the relevant Double Tax Avoidance Agreement (DTAA) for the country in which the revenue is earned. India has entered into DTAAs and several countries. The DTAA ensures that the taxpayer is not taxed twice on the income earned outside the country where you live. Since income can be taxed at its source, that is, at its source and is usually taxable in the country where you live, the DTAA ensures that the taxpayer is not adversely affected. The taxpayer is also allowed to take out the deducted TDS credit.


CEO Krishna Gopal

Krishna Gopal Varshney is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Myitronline.com. Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

Krishna Gopal Varshney
Co-founder & CEO