Form 67 for Foreign Tax Credit in India: Filing, Eligibility & Requirements

Last Updated on August 17, 2026

The Foreign Tax Credit (FTC) is a very crucial tax benefit that enables local taxpayers to avoid paying double tax on the income received from abroad. In case a taxpayer makes an income tax payment in the foreign country and the said income is taxable in India, the foreign tax credit ensures that the qualifying tax payment made in the foreign country can be used to set off against the tax liability in India, depending on certain conditions. This tax benefit is controlled by the Income Tax Act 1961, the DTAAs, and Rule 128 of the Income Tax Rules.

What is Foreign Tax Credit?

A tax reduction tool called the Foreign Tax Credit (FTC) lets a taxpayer claim credit in India for income tax paid in another country on income also taxed in India. The FTC seeks to end double taxation whereby the same income is taxed in India as well as in the other country.

A resident taxpayer who receives income from another country such as interest, dividends, capital gains, company income, or salary might have to pay taxes in both India and the other country. The FTC allows the taxpayer to lower their Indian tax liability by asserting credit for foreign taxes previously paid, under some limits.

Under the rules of the Income Tax ax Act 1961 and relevant Double Taxation Avoidance Agreements (DTAAs) entered into by India with foreign countries, the credit is usually available. Still, the credit amount is often capped at the lower of the Indian tax due on the same income or the foreign tax paid.

Qualified taxpayers must electronically submit Form 67 within the allotted time frame and retain supporting documents like foreign tax payment records and withholding tax certificates in order to claim the FTC on their Indian income tax return.

Eligibility To Claim Foreign Tax Credit

Foreign Tax Credit (FTC) allows an eligible individual to take credit in India for income tax paid abroad in respect of such income which is also taxed in India.

1. Resident taxpayer: The claimant must be resident in India in the relevant fiscal year.
2. Earning of foreign income: The taxpayer should have earned income from a foreign country or a particular foreign area.
3. Payment of tax in foreign jurisdiction: The income tax should have been paid or deducted in the foreign jurisdiction in respect of the income.
4. Taxation of income in India: As per the Income-tax Act, the same foreign income should also be taxed in India.
5. Foreign tax actually paid: The foreign tax should have been paid, deducted, or withheld.
6. Foreign taxes only qualify for FTC and not fines or interest and any other taxes which are not income tax.
7. The relief may be availed under a Double Taxation Avoidance Agreement (DTAA) or relevant provisions of the Act in case there is no such DTAA.
8. Requirements for Form 67 compliance: The taxpayer needs to file Form 67 electronically within the prescribed period.
9. Documentation: Foreign tax receipts, withholding tax certificates, tax certificates from the tax authority, and other necessary documents are to be maintained.
10. Reporting: Foreign income and corresponding foreign tax credits are to be reported accurately in the income tax return.
11. Limitations on the tax credit: The international tax credit is usually subject to the limitation of the minimum of foreign tax paid and the tax liability in India.

Common Source Countries and Their DTAA Positions With India

Country	DTAA with India	Key FTC Rate Cap
USA	Yes	Indian or US tax, whichever is lower
UK	Yes	Per treaty provisions
UAE	Yes (limited scope)	Per treaty provisions
Singapore	Yes	Per treaty provisions
Canada	Yes	Per treaty provisions
Australia	Yes	Per treaty provisions
Germany	Yes	Per treaty provisions
Saudi Arabia	No DTAA	Section 91 unilateral relief
China	Yes	Per treaty provisions

For NRIs returning to India with income from previous employer countries, always check whether a valid DTAA exists before filing Form 67. The tax credit amount can vary significantly between DTAA (Section 90) and non-DTAA (Section 91) relief.

What Is Form 67?

Foreign Tax Credit (FTC) can be claimed using Form 67 in accordance with the Income Tax Rules in India. This form is filed by those residents who have paid income tax in some foreign nation and whose income tax liability arises in India too.

1. This form will enable taxpayers to avail themselves of tax credits in respect of foreign taxes which have been paid in order to avoid double taxation.
2. It is usually filed by resident taxpayers including persons, companies, firms, etc., who wish to claim foreign tax credit.
3. It is necessary in compliance with Rule 128 of the Income Tax Rules.
4. Form 67 needs to be filed electronically through the income tax e-filing portal in normal circumstances.
5. It is often used to claim benefits of DTAA or relevant provisions of the Income Tax Act.
6. This form seeks information on foreign income, foreign country, foreign taxes and foreign tax credit claims.
7. Taxpayers are supposed to maintain proof of taxes paid abroad, withholding tax certificates, tax authority certificates, and other related documents.
8. Taxes claimed paid in a foreign currency have to be converted into Indian Rupees based on the approved rate.
9. International tax credits are frequently capped by the amount of tax paid or the Indian tax liability.
10. Timely filing of Form 67 is necessary for claiming the tax credit for foreign taxes paid.
11. Proper completion and submission of Form 67 is important for proper reporting of foreign income and tax paid.

When Must Form 67 Be Filed? Deadline and Penalty

Under Rule 128(9) of the Income Tax Rules, Form 67 must be filed on or before the due date of filing the income tax return for the relevant assessment year.

Taxpayer Type	ITR Due Date	Form 67 Latest Date
Individual/HUF (no audit)	July 31	July 31
Individual/company requiring audit	October 31	October 31
Transfer pricing cases	November 30	November 30

What happens if Form 67 is filed late?

This is contested legal territory:

• Earlier position: Several ITAT benches held that late filing of Form 67 disentitles the taxpayer from claiming FTC entirely; the credit was disallowed even when the taxes were actually paid abroad
• Recent judicial trend: Several ITAT benches (notably Delhi, Mumbai, and Bangalore) have taken a more lenient view, holding Form 67 as a directory (procedural) requirement, not mandatory, meaning late filing should not result in outright disallowance if the underlying tax was genuinely paid
• Safest approach: File Form 67 on or before the ITR due date. Don’t test the judicial uncertainty; the cost of losing FTC can be substantial

How To Claim Foreign Tax Credit In India? – Process

1. In order to be eligible, you need to be an Indian resident taxpayer who has paid foreign income tax on your taxable income in India.
2. Find out which section applies. You should claim relief under Section 90 or 90A if there is a DTAA between India and the foreign country; claim relief under Section 91.
3. Income earned from outside should be included in your Indian income tax return.
4. You can file Form 67 electronically through the income tax e-filing portal.
5. Continue furnishing the documents like proof of payment of foreign tax, withholding tax certificate, tax office certification, and other necessary documents.
6. In most cases, the FTC will be restricted to the lesser of the foreign tax paid or the Indian tax payable on that income.
7. Convert the foreign tax into INR based on the rate specified in Rule 128. The facts related to FTC must be stated appropriately in the ITR.

File Form 67 Online: Exact Steps

1. Log in to https://www.incometax.gov.in/iec/foportal/ with PAN credentials
2. Go to e-File → Income Tax Forms → File Income Tax Forms
3. Search for “Form 67”; it appears under “Persons not dependent on any source of income”
4. Select the Assessment Year for which FTC is being claimed
5. Fill in:
   • Country of income source
   • Nature of income (salary/dividend/capital gain etc.)
   • Foreign income amount (in INR after Rule 128(8) conversion)
   • Foreign tax paid (in INR after conversion)
   • Relief claimed (lower of foreign tax or Indian tax)
6. Upload supporting documents: TRC (Tax Residency Certificate), foreign tax payment certificate, bank statements showing foreign income
7. Verify using DSC or EVC. Form 67 requires digital verification
8. Note the acknowledgement number; attach this reference in the ITR remarks

Important: Form 67 is filed before or simultaneously with the ITR, not after. The ITR portal checks for Form 67 submission when Schedule TR is being filled.

Section 90, 90A, and 91: Which Applies to Your Country?

Your Country	Applicable Section	Relief Available
Country with which India has a DTAA (e.g., USA, UK, Singapore, UAE)	Section 90	Credit for foreign tax limited to lower of foreign tax or Indian tax on same income
Country with which India has a multilateral agreement (TIEA/SAARC countries)	Section 90A	Similar to Section 90
Country with no DTAA with India	Section 91	Unilateral relief deduction-based, not credit-based

Section 91: How Unilateral Relief Works Differently

When no DTAA exists, Section 91 provides relief at the lower of:

• Indian tax rate on the doubly taxed income, OR
• Foreign country’s tax rate on the same income

This is a deduction from tax, not a credit applied directly. The relief is less generous than DTAA-based credit under Section 90.

Always check the DTAA status of the country where you earned income before choosing the relief method. India has DTAAs with 90+ countries; check the CBDT website for the current list.

How to Convert Foreign Tax to INR for Form 67

Under Rule 128(8) of the Income Tax Rules, the foreign tax paid must be converted to INR using the Telegraphic Transfer Buying Rate (TTBR) of State Bank of India as on the last day of the month immediately preceding the month in which the income is credited or received.

Example: If US consulting income of $10,000 was received on October 15, use the SBI TTBR for September 30 (last day of the preceding month, September).

Foreign Income Event	Conversion Date
Salary/professional income received monthly	Last day of the month before receipt month
Dividend credited in account	Last day of the month before credit month
Capital gains on sale	Last day of the month before transaction month

This rate is available on the SBI website under “Forex Rates”; archived rates for past months are also available. Using the wrong rate (e.g., the rate on the actual date of receipt instead of the prescribed Rule 128 rate) is one of the most common errors in Form 67 filing.

Why Does Residential Status Matter For Foreign Tax Credit?

The residency factor is important because it affects the extent of taxable income in India and a taxpayer’s ability to avail themselves of the foreign tax credit.

1. Factor in determining taxability: The resident is usually taxable on his entire income, including foreign income, in India.
2. Double taxation issue: This is because the foreign income may have been taxed outside as well as within India, and therefore the FTC is used to avoid double taxation.
3. Primary factor for FTC: Normally, the FTC applies to resident taxpayers who have paid foreign tax on their income that is taxable in India.
4. Residents can take relief by using the foreign tax credit under the relevant provisions of the Income-tax Act and tax treaties.
5. Non-residents are taxable only on income arising, accrued, or deemed to accrue in India.
6. Foreign income is excluded: Foreign income that is not taxable in India is not normally eligible for FTC in India.
7. Prevents excessive credit: The residential criteria help ensure that the credit is claimed only for an income that is subject to tax in both jurisdictions.
8. Applicability of treaty: The DTAA provisions applicable are dependent on the taxpayer’s residency.
9. Proper calculation of the credit: The residential criteria impact the foreign income tax levied by India.
10. Requirement of compliance: Resident taxpayers are required to furnish their foreign income/ assets and the relevant documentation for FTC claims.
11. Prevention of disputes: Accurate determination of the residential criteria helps avoid rejection or re-evaluation of FTC claims.

Example to Understand How Foreign Tax Credit Works

Suppose that XYZ, who is an Indian citizen, earns ₹10,00,000 as consultancy fees from America. In America, a tax of ₹1,50,000 has been deducted from XYZ’s income. XYZ, being an Indian citizen, has income that is taxable in India. Suppose that the tax in India on his foreign income is ₹1,20,000.

XYZ can claim credit for either the foreign tax paid (₹1,50,000) or the tax payable in India (₹1,20,000). He can claim a foreign tax credit of ₹1,20,000 in India. The Indian tax liability on the foreign income is nil, but the foreign excess tax of ₹30,000 is not usually eligible for credit in India.

Can Unused Foreign Tax Credit Be Carried Forward?

Under Rule 128(6) of the Income Tax Rules, if the foreign tax paid exceeds the Indian tax liability on the same income, the excess foreign tax cannot be carried forward to future years.

This is illustrated directly in the example in the content: XYZ paid ₹1,50,000 in US taxes, but Indian tax was only ₹1,20,000 — the excess ₹30,000 is permanently lost.

This is a critical tax planning point: Unlike domestic TDS credits that can be refunded, or carry-forward losses that accumulate, FTC is use-it-or-lose-it in the same year. It cannot be:

• Carried forward to next year
• Claimed as a deduction instead
• Refunded as excess credit

For taxpayers expecting to pay higher foreign taxes than Indian taxes consistently (common for US-based income due to high US rates), planning around this non-carry-forward restriction is an important annual decision.

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Conclusion

Form 67 plays an important role in making claims for foreign tax credits and reducing the effect of double taxation. Filing on time, accurate income reporting, and proper documentation are some of the key elements to make an international tax credit claim. Knowing the related tax rules can assist you in avoiding disputes and delays. Kanakkupillai offers dependable and professional help regarding Form 67, tax credit claims, income tax return filing, and tax compliance.

Frequently Asked Questions

1. What is Form 67 with respect to the foreign tax credit?

Form 67 is the form that needs to be filed for the claim of the foreign tax credit in India. Resident taxpayers who have paid taxes in a foreign country on their income that is taxable in India generally need to file Form 67 via the online income tax portal before claiming the foreign tax credit.

2. Who should file Form 67?

The residents claiming foreign tax credits under the Income Tax Act need to generally file Form 67. It applies to individuals, companies, firms, and any other qualified taxpayer who has earned international income and paid foreign taxes, and is eligible for tax relief under the provisions of the Act.

3. What documents are generally required along with Form 67?

The taxpayer needs to maintain foreign tax paid receipts, foreign tax withholding certificates, foreign tax deducted documents, foreign tax authority certificates, and proofs of foreign income earned.

4. Is it possible to claim the foreign tax credit without filing Form 67?

Generally, the filing of Form 67 becomes essential while claiming the foreign tax credit in India. If the form is not filed during the period prescribed for filing, the claim of the foreign tax credit will face challenges. Compliance helps in processing the foreign tax credit and minimises chances of disputes.

5. Are all foreign taxes eligible for international tax credit?

Not all foreign taxes qualify for international tax credit. International tax credits can be available for qualified foreign income taxes on foreign income that is also taxable in India.