Form 67 – Foreign Tax Credit (FTC) Claim Under Rule 128 – N D Savla & Associates

NRI Tax Filing

Form 67 — Foreign Tax Credit (FTC) Claim
Rule 128, Section 90 / 90A / 91 & DTAA Relief

Foreign income and foreign tax reconciliation, Section 90 / 90A / 91 relief determination, Form 67 preparation and e-filing before the deadline, Schedule FSI / TR / FA coordination, and defence of late or rejected FTC claims — so that tax paid abroad is not paid a second time in India.

Part of our NRI Tax Filing practice: NRI Tax Filing DTAA Benefits Tax Residency Certificate Filing Return of Income

Overview

What Is Form 67 and the Foreign Tax Credit?

Form 67 is the online statement a resident taxpayer files on the Income Tax e-filing portal to claim Foreign Tax Credit (FTC) — credit in India for income tax already paid or deducted on the same income in a foreign country. Rule 128 of the Income Tax Rules governs eligibility and the amount of credit, Section 90 and Section 90A grant relief where a Double Taxation Avoidance Agreement applies, and Section 91 grants unilateral relief where no treaty exists. Without Form 67 on record, the Centralised Processing Centre has no evidence of the foreign tax paid and taxes the full income in India as if nothing were paid abroad — so the same income is taxed twice.

      Foreign Tax Credit is available only to a Resident taxpayer. A Non-Resident is taxed in India only on India-sourced income, so FTC generally does not arise. The audience for Form 67 is therefore Residents, RNORs with foreign-controlled business income, and — most commonly — returning NRIs whose global income has become taxable in India while foreign tax is still being deducted at source. Getting residential status right is the pre-condition for a valid FTC claim.
    

N D Savla & Associates handles the full FTC cycle — mapping each foreign income head against the foreign tax actually paid, deciding between Section 90/90A treaty relief and Section 91 unilateral relief, preparing and e-filing Form 67 before the return, and aligning it with Schedule FSI, Schedule TR and Schedule FA inside the ITR. Furthermore, our work connects to the wider NRI Tax Filing framework — residential status determination, DTAA benefits, and Tax Residency Certificate procurement.

A note on the coming change: under the Income-tax Act 2025, Form 67 is being renumbered as Form 44 in the draft Income-tax Rules 2026, effective for income earned from 1 April 2026. For every return being filed now — income up to FY 2025-26 (AY 2026-27) — Form 67 under Rule 128 remains the correct form. Our practice tracks the transition so the right form and label are used for the right year.

Common Cross-Border Profiles

When Does a Form 67 Claim Become Critical?

Form 67 matters wherever a resident of India has already suffered tax on income in another country. The profiles below are the ones where FTC most often gets missed — or filed wrongly and rejected:

Resident with Foreign Salary or RSUs

Residents earning salary, RSUs or ESOPs taxed abroad — foreign employer withholding must be credited against Indian tax on the same income, or it is effectively taxed twice.

Returning NRI, Now Ordinarily Resident

Returning Indians whose global income has become taxable in India while foreign banks, brokers and pension funds keep deducting tax at source — the highest-value FTC scenario.

Investor in US & Foreign Equities

Residents holding US or foreign stocks — dividend withholding (25% under the India-US treaty) and foreign capital gains tax must be claimed as FTC through Form 67 and Schedule TR.

Freelancer / Consultant Billing Abroad

Professionals and freelancers with foreign clients who withhold tax on fees — treaty rates and Section 91 relief must be matched to the withholding certificate to claim full credit.

Income from a No-Treaty Country

Residents with income from a country having no DTAA with India — relief runs under Section 91 unilateral credit, with its own conditions and documentary proof requirements.

Foreign Rental, Interest & Pension

Residents with foreign property rent, bank interest or overseas pension already taxed abroad — each head is mapped separately and credited up to the proportionate Indian tax.

Our Services

Our Form 67 & Foreign Tax Credit Services

Our FTC practice follows a structured workflow — foreign income and tax reconciliation, relief-section determination, Form 67 preparation and filing, ITR schedule alignment, and deadline or dispute management. The six blocks below cover the end-to-end engagement.

Foreign Income & Foreign Tax Reconciliation

FTC is only as strong as the reconciliation behind it. We map every foreign income head — salary, RSU/ESOP perquisite, dividends, interest, rent, capital gains, business income — against the foreign tax actually paid or deducted, using foreign tax withholding certificates, payslips, broker statements and foreign tax returns. We convert foreign tax to rupees using the prescribed telegraphic transfer buying rate on the last day of the month preceding the month in which the tax was paid or deducted, and reconcile against the India-side AIS and Form 26AS so the claim survives CPC processing.

Section 90 / 90A / 91 Relief Determination

We decide the correct relief route for each income stream — Section 90 or 90A where a DTAA with the source country applies, and Section 91 unilateral relief where no treaty exists. Credit is restricted to the lower of the foreign tax paid and the Indian tax attributable to that income, computed head by head rather than in aggregate. Disputed foreign tax, and any surcharge or cess, are handled per the specific rules under Rule 128 so no credit is over-claimed or lost.
Income Tax Act – Section 90, 90A, 91 · Rule 128

Form 67 Preparation & e-Filing Before the Return

We prepare and electronically file Form 67 on the Income Tax portal — Part A capturing income from outside India and the FTC claimed, and Part B capturing any refund of foreign tax on carry-backward of loss. Form 67 must be filed on or before the end of the relevant assessment year, provided the return has been furnished under Section 139(1) or 139(4); for an updated return under Section 139(8A), Form 67 is filed on or before the date of that return. We sequence the filing so Form 67 is on record before the return is processed.
Income Tax Rules – Rule 128(9), Form 67

Foreign Tax Proof & Documentation

A rejected FTC claim is almost always a documentation failure. We assemble the statutory proof — a certificate or statement of foreign income and the tax deducted or paid, from the foreign tax authority, the person responsible for deduction, or the taxpayer with supporting acknowledgement — and hold it ready for the Assessing Officer. Where a foreign tax return or refund alters the figure later, we track the revision so the Indian credit stays accurate and defensible.

Schedule FSI, TR & FA Coordination in the ITR

The credit claimed in Form 67 must tie exactly to the return. We complete Schedule FSI (foreign source income), Schedule TR (tax relief) and, for ordinarily residents, Schedule FA (foreign assets) so the three reconcile with each other and with Form 67 — the mismatch the Department flags most often. Schedule FA disclosure of foreign bank accounts, equity and property is coordinated to avoid Black Money Act exposure. This ties into our Filing Return of Income in India service.

Deadline Management & Late / Rejected Claim Defence

Furthermore, we manage the Rule 128(9) timeline and defend claims where Form 67 was delayed. A settled line of tribunal decisions treats the Form 67 filing requirement as procedural and directory rather than mandatory, so a genuine claim need not be forfeited for late filing alone. Where a claim is rejected or a notice is issued, we respond with the reconciliation, treaty position and case law — and pursue rectification or condonation as the facts require.
Rule 128(9) – Procedural / Directory

Broader Practice

Our Broader NRI Tax and International Taxation Services

Form 67 sits at the end of a cross-border chain that starts with residential status and treaty position. Our complete NRI tax practice covers:

Residential StatusResident / RNOR / Non-Resident classification — the pre-condition for any FTC claim.

DTAA BenefitsTreaty relief under Section 90/90A and the rate applied against foreign tax.

Tax Residency Certificate (TRC)TRC and Form 10F — the gateway to treaty rates behind the FTC claim.

Filing Return of Income in IndiaITR-2 or ITR-3 with Schedule FSI, TR and FA aligned to Form 67.

Exempt Income for NRIsNRE, FCNR and Section 112A carve-outs that sit outside the FTC computation.

Returning Indian TransitionRNOR window and the year global income — and FTC — first arises.

PAN Application for NRIsForm 49AA PAN — prerequisite for e-filing Form 67 and the return.

FEMA India Rules for NRIFEMA classification running parallel to Income Tax Act residency.

Frequently Asked Questions

Common Questions on Form 67 and FTC

What is Form 67 under the Income Tax Act?

Form 67 is the online statement a resident taxpayer files on the Income Tax e-filing portal to claim Foreign Tax Credit — credit in India for income tax already paid or deducted on the same income in a foreign country. It is filed under Rule 128 of the Income Tax Rules, and the credit itself flows from Section 90/90A where a DTAA applies or Section 91 where no treaty exists. Without Form 67 on record, the tax department cannot allow the credit. Our NRI Tax Filing service handles the full FTC and return cycle.

Who can claim Foreign Tax Credit and file Form 67?

Only a resident taxpayer is eligible to claim FTC. A Non-Resident is taxed in India only on India-sourced income, so foreign tax credit generally does not arise for an NRI. The typical claimants are Residents with foreign income, RNORs with foreign-controlled business income, and returning NRIs whose global income has become taxable in India while foreign tax is still deducted at source. Because eligibility turns on residential status, we determine that first — see our Residential Status page.

What is the deadline to file Form 67?

Form 67 must be filed on or before the end of the relevant assessment year, provided the return of income has been furnished under Section 139(1) or Section 139(4). For an updated return under Section 139(8A), Form 67 is filed on or before the date of furnishing that updated return. Because the deadline runs to the end of the assessment year — not the July return due date — a claim for FY 2024-25 (AY 2025-26) could be filed up to 31 March 2026. Our Filing Return of Income page covers how the two dates sequence.

What happens if Form 67 is filed late?

The Central Processing Centre may deny the credit if Form 67 is not on record when the return is processed, so timely filing is strongly advised. However, a consistent line of Income Tax Appellate Tribunal decisions has held that the Rule 128(9) filing requirement is procedural and directory rather than mandatory — meaning a genuine FTC claim should not be forfeited for delay alone, particularly where foreign tax details arrive late. Where a claim is rejected, we defend it with the reconciliation, treaty position and case law and pursue rectification or condonation.

What documents are needed to claim FTC in Form 67?

The core proof is a certificate or statement of the foreign income and the foreign tax deducted or paid — issued by the foreign tax authority, by the person responsible for deducting the tax, or by the taxpayer along with supporting acknowledgement of payment. Supporting evidence includes foreign payslips, withholding certificates, broker or bank statements, and the foreign tax return where filed. We assemble this pack and reconcile it against the Indian AIS and Form 26AS before filing.

Is Form 67 being replaced by Form 44?

Under the Income-tax Act 2025, Form 67 is being renumbered as Form 44 in the draft Income-tax Rules 2026, expected to apply to income earned from 1 April 2026 (tax year 2026-27 onwards). Rule 128 continues to govern eligibility and the quantum of credit — only the form number and portal label change. For every return being filed now, covering income up to FY 2025-26 (AY 2026-27), Form 67 remains the correct form. We track the transition so the right form is used for the right year.

Claiming Foreign Tax Credit this year?

Talk to our NRI Tax team — foreign income reconciliation, Section 90/90A/91 relief, Form 67 filing before the deadline, and Schedule FSI/TR/FA alignment under one roof.

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Form 67 — Foreign Tax Credit (FTC) ClaimRule 128, Section 90 / 90A / 91 & DTAA Relief