Amendment to Section 198: Inclusion of Foreign Taxes in Total Income Calculation

The amendment to Section 198 of the Income Tax Act now requires the inclusion of foreign taxes paid or payable in the total income calculation for Indian tax purposes. This change aims to ensure that taxpayers' total income accurately reflects global income, thereby affecting their tax liability in India. The amendment helps prevent double taxation by allowing foreign tax credits, aligning with international tax standards and treaties. It enhances transparency and simplifies compliance for individuals and entities with international income sources, fostering fair taxation practices.