The finance ministry was quick to notice that some taxpayers were not including taxes withheld outside India for the purpose of calculating their total income. This, in turn, led to under reporting of income. These individuals offered the overseas income net of tax and at the same time claimed a foreign tax credit (FTC) for taxes withheld overseas against their India tax liability. In short - they got a double advantage. The Budget proposes to amend section 198 of the I-T Act to include income taxes paid outside India for the purpose of computing the income of the taxpayer who is liable to tax in India. This proposal will be effective financial year 2024-25.