Form 67 and Claim of Foreign Tax Credit (FTC)

Form 67 and Claim of Foreign Tax Credit (FTC). Form 67 is an essential document for Indian resident taxpayers who have earned foreign income and paid taxes abroad. Such taxpayers may face the challenge of double taxation—being taxed in both the foreign country and again in India. To avoid this, the Indian tax laws allow the claiming of Foreign Tax Credit (FTC), and Form 67 is the form through which this claim is made. This article explains the importance, applicability, due date, sections, rules, required documents, and procedure for filing Form 67 in a detailed and easy-to-understand format.
What is Foreign Tax Credit (FTC)?
Foreign Tax Credit (FTC) is a mechanism under the Indian Income Tax Act that provides relief from double taxation. It applies when an Indian resident earns income from a foreign country where tax is already deducted at source. Since India taxes global income, this income must also be declared in India, potentially resulting in double taxation.
To resolve this, India allows the resident taxpayer to claim credit for the foreign tax already paid. This credit is adjusted against the Indian tax liability on that foreign income. The FTC ensures that the taxpayer only pays the difference between the Indian tax liability and the tax already paid in the foreign country.
Example: If you are an Indian resident receiving royalty income of €3,000 from Germany, Germany may deduct 10% as tax at source. You would receive €2,700 after deduction. In India, you must declare the full €3,000, but you can claim a Foreign Tax Credit of €300 against your Indian tax liability on that income.
Relevant Legal Provisions for FTC: Section 90 and Section 91
The Income Tax Act has two key provisions under which Foreign Tax Credit can be claimed:
Section 90
This applies when India has a Double Taxation Avoidance Agreement (DTAA) with the foreign country. In such cases, relief is provided as per the DTAA. The credit is limited to the lower of the foreign tax paid or the Indian tax payable on that income. This is known as bilateral relief.
Section 91
This applies when there is no DTAA with the foreign country. In such scenarios, unilateral relief is provided. The taxpayer must be a resident of India, and the same income must be taxed in both countries. Relief is again limited to the lower of the two tax amounts.
Rules for Claiming FTC in India (Rule 128)
The Central Board of Direct Taxes (CBDT) introduced Rule 128 effective from April 1, 2017, to bring uniformity and clarity in the process of claiming FTC. The important rules are:

Year of Claim: The FTC can be claimed in the same year in which the foreign income is offered to tax in India.

Eligible Components: FTC can be claimed only against the Indian tax (including surcharge and cess) and not against any penalty, interest, or fees.

Disputed Tax: FTC cannot be claimed for foreign tax that is disputed by the taxpayer.

Minimum Alternate Tax (MAT): FTC is also available for MAT liability under Section 115JB.

Source-Wise and Country-Wise Computation: FTC must be calculated separately for each source of income and each country.

Credit Limit: The FTC allowed is the lower of:

Tax payable in India on that foreign income

Foreign tax paid on the same income

Currency Conversion: Foreign tax paid must be converted using the Telegraphic Transfer Buying Rate (TTBR) as on the last day of the month prior to the month in which tax was paid.

What is Form 67?
Form 67 is a statement required to be filed by taxpayers claiming Foreign Tax Credit under the provisions of Section 90 or Section 91 of the Income Tax Act. Filing Form 67 is mandatory for claiming the FTC, and failure to file this form may lead to denial of credit.
The Income Tax Rules, 1962 (specifically Rule 128(9)) require that Form 67 be submitted on or before the end of the assessment year, along with or before the filing of the return under Section 139(1) (original return) or Section 139(4) (belated return).
Who Needs to File Form 67?
Any Indian resident taxpayer who has:

Earned income from a foreign country,

Paid taxes on that income abroad, and

Wishes to claim credit for those foreign taxes in India

must file Form 67 before claiming Foreign Tax Credit in their Indian Income Tax Return.
Due Date for Filing Form 67
For Assessment Year (AY) 2025–26, Form 67 must be filed on or before March 31, 2026, provided the return of income is filed under Section 139(1) or 139(4).
If an updated return is filed under Section 139(8A), Form 67 must be filed on or before the date of filing the updated return.
Note: If the taxpayer wants to claim relief under Section 90, Form 67 must be submitted before the end of the assessment year. Filing after this date will disqualify the claim.
Detailed Contents of Form 67
Form 67 is divided into four major sections:
1. Part A - Basic Information This part captures the taxpayer’s basic details:

Full name of the taxpayer

PAN or Aadhaar number

Address

Assessment year

Details of foreign income and tax paid

2. Part B - Refunds and Disputes This section is applicable if:

The taxpayer has received a refund of foreign tax due to carry backward of losses.

The foreign tax is disputed.

3. Verification This part includes a declaration by the taxpayer affirming that all the information provided is true and correct to the best of their knowledge. It acts as a self-verification.
4. Attachments This section includes necessary supporting documents:

Certificate from the foreign tax authority or payer

Proof of tax payment or deduction

Documents Required to Claim FTC with Form 67
To successfully claim FTC, the following documents must be submitted with Form 67:

Form 67 Statement:

Includes foreign income offered to tax in India.

Amount of foreign tax deducted or paid.

Tax Certificate or Statement:

Issued by the foreign tax authority or the person responsible for tax deduction.

Alternatively, a self-declaration can be submitted by the taxpayer.

Proof of Tax Payment:

Bank receipts, payment challans, or tax slips showing payment of foreign tax.

Step-by-Step Process to File Form 67 Online
Form 67 can only be filed through the official e-Filing portal of the Income Tax Department. Here’s the step-by-step procedure:
Step 1: Log in to the Income Tax e-Filing Portal using your PAN and password.
Step 2: Go to the dashboard, click on ‘e-File’ > ‘Income Tax Forms’ > ‘File Income Tax Forms’.
Step 3: On the next screen, search for ‘Form 67’ or scroll to locate ‘Double Taxation Relief (Form 67)’. Click on ‘File Now’.
Step 4: Select the applicable Assessment Year (AY) and click ‘Continue’.
Step 5: Read the instructions carefully and click on ‘Let’s Get Started’.
Step 6: Form 67 will appear. Fill all required details in Part A and Part B.
Step 7: Attach all necessary documents and tax certificates.
Step 8: Click on ‘Preview’ to verify all the information filled.
Step 9: Once verified, click on ‘Proceed to e-Verify’.
Step 10: Choose your verification method - Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
Step 11: After successful e-verification, a confirmation message will be shown along with an acknowledgement number and transaction ID.
Important Tips While Filing Form 67

Always ensure that the foreign tax paid is not under dispute.

File Form 67 before filing your Income Tax Return to avoid rejection of FTC.

Keep a digital record of the acknowledgement and transaction ID for future reference.

Currency conversion must be done using the TTBR of the last day of the month before tax payment.

Form 67 is mandatory even when the taxpayer is filing an updated return under Section 139(8A).

Conclusion
Form 67 is an important compliance requirement for resident taxpayers seeking relief from double taxation through Foreign Tax Credit (FTC). Filing this form accurately and within the applicable due date ensures that the credit for taxes paid abroad is granted under Indian tax law. With the rules under Section 90, 91, and Rule 128, and the availability of electronic filing, the process has become more streamlined. Taxpayers are advised to keep proper documentation and consult experts if needed to avoid rejection of the FTC claim.
Get professional assistance from Compliance Calendar LLP to file your Form 67 accurately and on time.
Email: info@ccoffice.in
Call/Whatsapp: +91 9988424211
FAQs
Q1. Who is required to file Form 67?
Ans. Any Indian resident taxpayer who has earned income from a foreign country and has paid taxes on that income abroad must file Form 67 to claim the Foreign Tax Credit (FTC). This applies even if the foreign tax has been deducted at source.
Q2. Is it mandatory to file Form 67 before filing the Income Tax Return (ITR)?
Ans. Yes, Form 67 must be filed before or along with the filing of your ITR under Section 139(1) or Section 139(4). If Form 67 is not filed on time, the claim for FTC may be rejected by the Income Tax Department.
Q3. What is the due date to file Form 67 for AY 2025–26?
Ans. For AY 2025–26, Form 67 must be filed on or before March 31, 2026, provided the return is filed under Section 139(1) or 139(4). If an updated return is filed under Section 139(8A), Form 67 must be submitted before that updated return is filed.
Q4. Can FTC be claimed on foreign taxes that are under dispute?
Ans. No, Foreign Tax Credit (FTC) cannot be claimed on taxes that are under dispute in the foreign country. Only taxes that have been actually paid and are not in litigation are eligible for credit.
Q5. What if I miss filing Form 67 before the due date—can I still claim the FTC?
Ans. No, if Form 67 is not filed before the end of the assessment year, the Income Tax Department may disallow the claim for FTC, especially for relief under Section 90. Timely filing is mandatory for claiming the benefit.
Q6. Is Form 67 applicable if India has no DTAA with the foreign country?
Ans. Yes, even if there is no DTAA between India and the foreign country, taxpayers can claim FTC under Section 91 of the Income Tax Act. However, Form 67 must still be submitted for this purpose.
Q7. Can I file Form 67 manually or is it only available online?
Ans. Form 67 can only be filed online through the Income Tax Department's e-filing portal. The form must be submitted using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
Q8. What documents should I attach while filing Form 67?
Ans. You must attach the following:

Certificate or statement from the foreign tax authority or payer

Proof of payment or deduction of foreign tax

Self-declaration in the verification section of Form 67. These attachments support the claim and are required under Rule 128.

Form 67 is an essential document for Indian resident taxpayers who have earned foreign income and paid taxes abroad. Such taxpayers may face the challenge of double taxation—being taxed in both the foreign country and again in India. To avoid this, the Indian tax laws allow the claiming of Foreign Tax Credit (FTC), and Form 67 is the form through which this claim is made. This article explains the importance, applicability, due date, sections, rules, required documents, and procedure for filing Form 67 in a detailed and easy-to-understand format.

What is Foreign Tax Credit (FTC)?

Foreign Tax Credit (FTC) is a mechanism under the Indian Income Tax Act that provides relief from double taxation. It applies when an Indian resident earns income from a foreign country where tax is already deducted at source. Since India taxes global income, this income must also be declared in India, potentially resulting in double taxation.

To resolve this, India allows the resident taxpayer to claim credit for the foreign tax already paid. This credit is adjusted against the Indian tax liability on that foreign income. The FTC ensures that the taxpayer only pays the difference between the Indian tax liability and the tax already paid in the foreign country.

Example: If you are an Indian resident receiving royalty income of €3,000 from Germany, Germany may deduct 10% as tax at source. You would receive €2,700 after deduction. In India, you must declare the full €3,000, but you can claim a Foreign Tax Credit of €300 against your Indian tax liability on that income.

Relevant Legal Provisions for FTC: Section 90 and Section 91

The Income Tax Act has two key provisions under which Foreign Tax Credit can be claimed:

Section 90

This applies when India has a Double Taxation Avoidance Agreement (DTAA) with the foreign country. In such cases, relief is provided as per the DTAA. The credit is limited to the lower of the foreign tax paid or the Indian tax payable on that income. This is known as bilateral relief.

Section 91

This applies when there is no DTAA with the foreign country. In such scenarios, unilateral relief is provided. The taxpayer must be a resident of India, and the same income must be taxed in both countries. Relief is again limited to the lower of the two tax amounts.

Rules for Claiming FTC in India (Rule 128)

The Central Board of Direct Taxes (CBDT) introduced Rule 128 effective from April 1, 2017, to bring uniformity and clarity in the process of claiming FTC. The important rules are:

Year of Claim: The FTC can be claimed in the same year in which the foreign income is offered to tax in India.
Eligible Components: FTC can be claimed only against the Indian tax (including surcharge and cess) and not against any penalty, interest, or fees.
Disputed Tax: FTC cannot be claimed for foreign tax that is disputed by the taxpayer.
Minimum Alternate Tax (MAT): FTC is also available for MAT liability under Section 115JB.
Source-Wise and Country-Wise Computation: FTC must be calculated separately for each source of income and each country.
Credit Limit: The FTC allowed is the lower of:

Tax payable in India on that foreign income
Foreign tax paid on the same income

Currency Conversion: Foreign tax paid must be converted using the Telegraphic Transfer Buying Rate (TTBR) as on the last day of the month prior to the month in which tax was paid.

What is Form 67?

Form 67 is a statement required to be filed by taxpayers claiming Foreign Tax Credit under the provisions of Section 90 or Section 91 of the Income Tax Act. Filing Form 67 is mandatory for claiming the FTC, and failure to file this form may lead to denial of credit.

The Income Tax Rules, 1962 (specifically Rule 128(9)) require that Form 67 be submitted on or before the end of the assessment year, along with or before the filing of the return under Section 139(1) (original return) or Section 139(4) (belated return).

Who Needs to File Form 67?

Any Indian resident taxpayer who has:

Earned income from a foreign country,
Paid taxes on that income abroad, and
Wishes to claim credit for those foreign taxes in India

must file Form 67 before claiming Foreign Tax Credit in their Indian Income Tax Return.

Due Date for Filing Form 67

For Assessment Year (AY) 2025–26, Form 67 must be filed on or before March 31, 2026, provided the return of income is filed under Section 139(1) or 139(4).

If an updated return is filed under Section 139(8A), Form 67 must be filed on or before the date of filing the updated return.

Note: If the taxpayer wants to claim relief under Section 90, Form 67 must be submitted before the end of the assessment year. Filing after this date will disqualify the claim.

Detailed Contents of Form 67

Form 67 is divided into four major sections:

1. Part A - Basic Information This part captures the taxpayer’s basic details:

Full name of the taxpayer
PAN or Aadhaar number
Address
Assessment year
Details of foreign income and tax paid

2. Part B - Refunds and Disputes This section is applicable if:

The taxpayer has received a refund of foreign tax due to carry backward of losses.
The foreign tax is disputed.

3. Verification This part includes a declaration by the taxpayer affirming that all the information provided is true and correct to the best of their knowledge. It acts as a self-verification.

4. Attachments This section includes necessary supporting documents:

Certificate from the foreign tax authority or payer
Proof of tax payment or deduction

Documents Required to Claim FTC with Form 67

To successfully claim FTC, the following documents must be submitted with Form 67:

Form 67 Statement:

Includes foreign income offered to tax in India.
Amount of foreign tax deducted or paid.

Tax Certificate or Statement:

Issued by the foreign tax authority or the person responsible for tax deduction.
Alternatively, a self-declaration can be submitted by the taxpayer.

Proof of Tax Payment:

Bank receipts, payment challans, or tax slips showing payment of foreign tax.

Step-by-Step Process to File Form 67 Online

Form 67 can only be filed through the official e-Filing portal of the Income Tax Department. Here’s the step-by-step procedure:

Step 1: Log in to the Income Tax e-Filing Portal using your PAN and password.

Step 2: Go to the dashboard, click on ‘e-File’ > ‘Income Tax Forms’ > ‘File Income Tax Forms’.

Step 3: On the next screen, search for ‘Form 67’ or scroll to locate ‘Double Taxation Relief (Form 67)’. Click on ‘File Now’.

Step 4: Select the applicable Assessment Year (AY) and click ‘Continue’.

Step 5: Read the instructions carefully and click on ‘Let’s Get Started’.

Step 6: Form 67 will appear. Fill all required details in Part A and Part B.

Step 7: Attach all necessary documents and tax certificates.

Step 8: Click on ‘Preview’ to verify all the information filled.

Step 9: Once verified, click on ‘Proceed to e-Verify’.

Step 10: Choose your verification method - Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Step 11: After successful e-verification, a confirmation message will be shown along with an acknowledgement number and transaction ID.

Important Tips While Filing Form 67

Always ensure that the foreign tax paid is not under dispute.
File Form 67 before filing your Income Tax Return to avoid rejection of FTC.
Keep a digital record of the acknowledgement and transaction ID for future reference.
Currency conversion must be done using the TTBR of the last day of the month before tax payment.
Form 67 is mandatory even when the taxpayer is filing an updated return under Section 139(8A).

Conclusion

Form 67 is an important compliance requirement for resident taxpayers seeking relief from double taxation through Foreign Tax Credit (FTC). Filing this form accurately and within the applicable due date ensures that the credit for taxes paid abroad is granted under Indian tax law. With the rules under Section 90, 91, and Rule 128, and the availability of electronic filing, the process has become more streamlined. Taxpayers are advised to keep proper documentation and consult experts if needed to avoid rejection of the FTC claim.

Get professional assistance from Compliance Calendar LLP to file your Form 67 accurately and on time.

Email: info@ccoffice.in

Call/Whatsapp: +91 9988424211

FAQs

Q1. Who is required to file Form 67?

Ans. Any Indian resident taxpayer who has earned income from a foreign country and has paid taxes on that income abroad must file Form 67 to claim the Foreign Tax Credit (FTC). This applies even if the foreign tax has been deducted at source.

Q2. Is it mandatory to file Form 67 before filing the Income Tax Return (ITR)?

Ans. Yes, Form 67 must be filed before or along with the filing of your ITR under Section 139(1) or Section 139(4). If Form 67 is not filed on time, the claim for FTC may be rejected by the Income Tax Department.

Q3. What is the due date to file Form 67 for AY 2025–26?

Ans. For AY 2025–26, Form 67 must be filed on or before March 31, 2026, provided the return is filed under Section 139(1) or 139(4). If an updated return is filed under Section 139(8A), Form 67 must be submitted before that updated return is filed.

Q4. Can FTC be claimed on foreign taxes that are under dispute?

Ans. No, Foreign Tax Credit (FTC) cannot be claimed on taxes that are under dispute in the foreign country. Only taxes that have been actually paid and are not in litigation are eligible for credit.

Q5. What if I miss filing Form 67 before the due date—can I still claim the FTC?

Ans. No, if Form 67 is not filed before the end of the assessment year, the Income Tax Department may disallow the claim for FTC, especially for relief under Section 90. Timely filing is mandatory for claiming the benefit.

Q6. Is Form 67 applicable if India has no DTAA with the foreign country?

Ans. Yes, even if there is no DTAA between India and the foreign country, taxpayers can claim FTC under Section 91 of the Income Tax Act. However, Form 67 must still be submitted for this purpose.

Q7. Can I file Form 67 manually or is it only available online?

Ans. Form 67 can only be filed online through the Income Tax Department's e-filing portal. The form must be submitted using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Q8. What documents should I attach while filing Form 67?

Ans. You must attach the following:

Certificate or statement from the foreign tax authority or payer
Proof of payment or deduction of foreign tax
Self-declaration in the verification section of Form 67. These attachments support the claim and are required under Rule 128.