Foreign Tax Credit & Form 67 Filing
If you paid tax abroad on income that India also taxes, Form 67 is how you claim a credit for it and avoid paying twice. For AY 2026-27 it must be filed on the Income Tax e-filing portal by 31 March 2027. We prepare the form, tie it to your return and file it.
What it is
Foreign tax credit (FTC) is a set-off against your Indian tax for tax you have already paid in another country on the same income. Say you work remotely for a US company. That pay is taxable in India if you are a resident, and the US may have taxed it first. FTC stops the same income being taxed twice.
The credit is claimed under Section 90 or 90A (where India has a tax treaty with that country) or Section 91 (where it does not), read with Rule 128 of the Income-tax Rules, 1961. The claim has two parts: Form 67, filed on the Income Tax e-filing portal, and Schedules FSI and TR in your return. From tax year 2026-27 the Income-tax Act, 2025 (Section 159) and the Income-tax Rules, 2026 apply, and Form 44 takes over from Form 67. For AY 2026-27 returns, Form 67 still applies.
Who it applies to
Salaried staff with foreign pay
Employees posted abroad, or on a foreign payroll. Picture a Faridabad engineer who worked on-site in the US for a few months: the US withheld tax, and India taxes the same salary.
Investors in foreign shares
People who receive US or other overseas dividends, or whose RSU and share sale proceeds carry foreign withholding. See our page on capital gains tax filing for the Indian side of the gain.
Freelancers and consultants
Residents who bill overseas clients through platforms or agencies that deduct tax at source before paying out.
Why it matters
You recover tax you already paid
Without a valid claim, both countries tax the same income. A correct claim reduces your Indian tax by what you paid abroad, up to a cap.
The credit is capped, so accuracy counts
The credit is the lower of the foreign tax paid and the Indian tax on that income. Claiming more than that invites a notice and an adjustment.
A missed deadline kills the claim
Here is the catch: the credit does not carry forward. If Form 67 is not filed in time, that year’s credit is lost for good.
Documents required
Proof of foreign income and tax
- Foreign tax certificate or withholding statement (for example Form 1042-S for US dividends)
- Proof that the tax was actually paid
- Foreign tax return or employer pay certificate, where relevant
Treaty and residency papers
- Tax Residency Certificate or declarations, where a treaty rate is claimed
- Copy of the relevant DTAA article
- PAN, and the foreign tax ID if you have one
From your Indian filing
- Salary, capital gains and other income workings
- Bank statements showing foreign credits
- Login access or authorisation for the e-filing portal
How it works
Collect the foreign tax records
We ask for the withholding certificates and payment proof for each country and each income type. Gaps are easier to fix now than after filing.
Convert and compute the credit
We convert foreign income and tax into rupees at the SBI telegraphic transfer buying rate. Then we take the lower of foreign tax paid and Indian tax on that income.
File Form 67 on the portal
In practice, we prepare Form 67 with the supporting documents and file it on the Income Tax e-filing portal under e-File, Income Tax Forms. Filing it before your return keeps the numbers consistent.
Reflect it in the return
The same figures go into Schedule FSI and Schedule TR of your income tax return. We cross-check them against Form 67 and file the return, then help you e-verify.
Timelines
AY 2026-27 (income of FY 2025-26)
Form 67 can be filed on or before 31 March 2027, the end of the assessment year, whether the return is original or belated.
Updated return
Where you claim credit through an updated return under Section 139(8A), Form 67 must be filed on or before the date of that updated return.
From tax year 2026-27
Income-tax Act, 2025 applies. Form 44 is the equivalent of Form 67 under the Income-tax Rules, 2026. We will confirm the final form requirements when you file.
What happens if you miss it
You lose the credit for that year
Foreign tax credit is not carried forward. The tax paid abroad stays a cost, and India taxes the same income in full.
Your claim can be adjusted or questioned
If Schedule FSI or TR does not match Form 67, the department can reduce the credit when it processes your return and send an intimation.
Disputed foreign tax is not creditable
If you are contesting the foreign tax, you claim the credit only after the dispute is settled, and within the prescribed time.
Frequently asked questions
What is Form 67 and who must file it?
Form 67 is the statement of foreign income and foreign tax paid that you file to claim foreign tax credit in India. Any resident taxpayer who wants credit for tax paid abroad must file it on the Income Tax e-filing portal. Without it, the credit is not allowed even if the tax is genuinely paid. We prepare and file it with your return, so the claim holds.
What is the due date for Form 67 for AY 2026-27?
Form 67 for AY 2026-27 can be filed on or before 31 March 2027, the end of the assessment year. This applies to original and belated returns. For an updated return, it must be filed by the date of that return. We recommend filing it before your ITR, so Schedule FSI matches. Do not wait for the last day.
How much credit can I claim?
The credit is the lower of the foreign tax actually paid and the Indian tax payable on that same income. If you paid more abroad than India would charge, the excess is not refunded and not carried forward. We compute this income by income and country by country, so you claim the right amount and nothing that invites a query.
Do I need a tax treaty with the country?
No. If India has a double tax avoidance agreement with the country, credit comes under Section 90. If not, Section 91 gives relief where the foreign tax is similar to Indian income tax. The rules and treaty rates differ, so we check the relevant article first. Either way, Form 67 is the filing that supports the claim.
Which exchange rate do I use?
Convert foreign income and foreign tax into rupees using the SBI telegraphic transfer buying rate, as the rules prescribe. Using a random bank or market rate can create a mismatch in Schedule FSI. We apply the prescribed rate to every entry and keep the workings on file, so any query can be answered quickly.
Can I claim credit if the foreign tax is disputed?
Not until the dispute is settled. Foreign tax that is under appeal or contest is not creditable. After settlement, you can claim the credit by filing within the time allowed, and the new rules add Form 45 for this situation. If you are in this position, tell us early and we will plan the filing.
Is Form 67 replaced by Form 44?
From tax year 2026-27, under the Income-tax Act, 2025 and the Income-tax Rules, 2026, Form 44 is the corresponding form. For AY 2026-27, covering income of FY 2025-26, Form 67 is still used. We follow whichever applies to your year and will tell you before you file. The cap on credit stays the same.
Which ITR form do I need if I have foreign income?
If you have foreign income or foreign assets, ITR-1 is not available, so you file ITR-2, or ITR-3 if you have business income. You also report foreign assets in Schedule FA, on a calendar-year basis. Our team picks the right form, fills FSI, TR and FA, and makes sure they agree with Form 67.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Ready to begin?
Send us your foreign tax certificates and last return, and we will tell you what credit you can claim and by when.