Form 67 (Form for claiming Foreign Tax Credit)
In an increasingly globalized economy, Indian residents often earn income from foreign sources. While this offers diverse opportunities, it can also lead to the challenge of paying tax on the same income both in the foreign country and in India. To prevent such double taxation, the Indian Income Tax Act, 1961, provides for Foreign Tax Credit (FTC). To avail this crucial relief, filing Form 67 is mandatory. At Account Assure, a leading Financial Audit Firm, we specialize in meticulously preparing and filing Form 67, ensuring you correctly claim your FTC and optimize your global tax liabilities.
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What is Form 67 and Foreign Tax Credit (FTC)?
Foreign Tax Credit (FTC) is a mechanism under the Income Tax Act, 1961 (specifically Rule 128 of the Income Tax Rules, 1962) that allows an Indian resident taxpayer to claim credit for taxes paid in a foreign country on income that is also taxable in India. This prevents the same income from being taxed twice, once in the country of source and again in India.
Form 67 is the prescribed form that taxpayers must mandatorily file online to claim this Foreign Tax Credit. Without filing Form 67, even if you have paid tax abroad, the Income Tax Department will not allow the FTC benefit, leading to a higher tax liability in India.
The ability to claim FTC arises either from a Double Taxation Avoidance Agreement (DTAA) between India and the foreign country, or, in the absence of a DTAA, under Section 91 of the Income Tax Act (unilateral relief).
Contents of Form 67
Form 67 contains the below four sections:
- Part A – Part A contains basic information, such as name, PAN or Aadhaar number, address, assessment year, receipt of details of the income from a country outside India and details of foreign tax credit claimed.
- Part B – Part B contains details of refund of foreign tax as result of carry backward of losses and disputed foreign tax.
- Verification – This section contains a self-declaration form as per the Income Tax Rules, 1962.
- Attachments – The last section is attachments, where the taxpayer needs to attach a copy of the certificate or statement and proof of payment or deduction of foreign tax.
Form 67 Due Date for AY 2025-26
The Central Board of Direct Taxes (CBDT) revised Rule 128 to provide that Form 67 can be filed on or before the end of an assessment year if the return of income for that year was filed within the time stipulated in Section 139(1) or Section 139(4).
If the assessee has filed an updated return under Section 139(8A), Form 67 (related to income included in the updated return) must be filed on or before the date of filing of the updated return. However, Form 67 to claim Section 90 relief needs to be filed before the end of the assessment year. Filing Form 67 after the end of the assessment year will not make you eligible to claim the credit, still you can apply for the condonation of delayed submission provided you have a valid reason.
Documents Required to Claim FTC
In accordance with Rule 128, in order to claim FTC, the taxpayer is required to furnish the following documents on or before the end of the assessment year.
- A statement of :
- Foreign income offered to tax
- Foreign tax deducted or paid on such income in Form No. 67
- Certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the taxpayer :
- From the tax authority of the foreign country
- From the person responsible for the deduction of such tax
- Signed by the taxpayer
- Proof of payment of taxes outside India.
Steps to Fill & Submit Form 67
Here is the step-by-step process to file Form MSME-1:
Log in to the Income Tax e-Filing portal using your user ID and password.
On the ‘Dashboard’, click ‘e-File’, click ‘Income Tax Forms’ and select ‘File Income Tax Forms’.
On the next page, select ‘Persons not dependent on any Source of income’, proceed to the next subpage, and click on ‘File Now’ next to ‘Double Taxation Relief (Form 67)’.
Select the ‘Assessment Year (AY)’ and click ‘Continue’.
On the instructions page, click ‘Let’s Get Started’.
Form 67 will be displayed. Fill the required details and click ‘Preview’.
Verify the details and ensure you have uploaded the supporting document or the proof of tax withholding and after that click ‘Proceed to e-Verify’.
Click ‘Yes’ on the confirmation message to submit the form.
It will be redirected to the e-verify page. After successful e-verification, a success message will be displayed along with a transaction ID and acknowledgement number.
Note the transaction ID and acknowledgement for future reference. You will also receive a confirmation message to the email ID registered on the e-Filing portal.
How Account Assure Ensures Seamless Form 67 Filing & Maximum FTC
As your trusted Financial Audit Firm, Account Assure provides specialized and meticulous support to ensure you correctly claim your Foreign Tax Credit:
DTAA & Section 91 Analysis Analysis
We analyze your foreign income and the applicable DTAA (or Section 91) to identify the most beneficial FTC provisions.
Data Collection & Verification
- Guidance on gathering all necessary documents, including foreign income statements, foreign tax payment proofs, and TRC.
- Thorough verification of all data, including currency conversions, for accuracy.
Precise FTC Calculation
Our tax experts perform the complex FTC calculation as per Rule 128, considering all conditions and limitations, to maximize your eligible credit.
Accurate Form 67 Preparation
Meticulous preparation of Form 67 with all required particulars and the calculated FTC amount.
Timely Online Filing
Prompt and secure online submission of Form 67 on the Income Tax e-filing portal before your ITR is filed.
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