Foreign Tax Credit (‘FTC’) - Meaning of foreign tax

Country with which India has DTAA

Foreign tax means the tax covered under said DTAA.

Country with which India has NO DTAA

Foreign tax means the tax payable under the law in force in that country in the nature of income-tax referred to in clause (iv) of the Explanation to section 91 of the Income-tax Act, 1961 (‘the Act’)

Clause (iv) of the Explanation to section 91

The expression "income-tax" in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.