Re: Foreign tax credit & Undisclosed Foreign Assets

Whether amount payable under VSV by settling the appeal will be considered as “tax paid” under the DTAA and the taxpayer in foreign country will be able to take tax credit of the same?

No clarification available.  

 

In our view, since the tax is paid by the same challan as used under the income tax law. the VSV disputed tax paid should be viewed as tax paid under Income tax law and should be eligible for foreign tax credit in the jurisdiction of the residence of taxpayer as per the applicable DTAA in the same way as income tax is allowable.   

 

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