Getting Foreign Tax Credit & How to Submit Form 44 (aka Form 67) Online?

📜 Form 44 of IT Act 2025 (Form 67 of IT Act 1961) is mandatory to file before claiming Foreign Tax Credit (FTC) while filing as a resident Indian (ROR) or during the RNOR period. Since this involves significant tax implications, every taxpayer wishing to claim FTC should understand the process and important considerations.

1. Background

The impact of taxation is an important factor to consider when making trade and investment decisions in other countries. One major outcome of globalization is the noticeable effect of one country’s domestic tax policies on the economy of another country. This has created a need to regularly evaluate tax systems across countries and introduce appropriate reforms.

2. Double Taxation

A taxpayer who is a resident of one country may earn income from a source located in another country, which can result in double taxation. This occurs because of two basic rules that allow both the country of residence and the country where the income originates to exercise taxation rights. These rules are:

1. Source Rule: This rule states that income should be taxed in the country where it arises, regardless of whether the income belongs to a resident or non-resident.
2. Residence Rule: This rule states that the authority to tax should belong to the country where the taxpayer is a resident.

Double taxation occurs when both rules apply to the same assessee. It refers to the taxation of the same income twice in the hands of the assessee. To address such situations, the Income Tax Act, 1961 provides for double taxation relief.

3. Foreign Tax Credit

A resident assessee is eligible to receive credit for foreign tax paid by them in a country or specified territory outside India, whether through deduction or otherwise, in the year in which the income corresponding to that foreign tax has been offered to tax in India.

4. 📄 Form 44, aka Form 67

📄 Form 44, aka Form 67, is a statement or form that taxpayers are required to submit to claim Foreign Tax Credit. Assessees seeking credit for foreign tax paid in another country must prepare and submit 📄 Form 44, aka Form 67, online along with their income tax return.

As per the Income Tax Rules 2026:

1. TIN of the Foreign Country: TIN of the foreign country is mandatory in Form 44 (Form 67) with effect from 1st April 2026.
2. Accountant Verification: Verification by an accountant is required in the new form if:
   1. The foreign tax credit exceeds ₹1 lakh, or
   2. The taxpayer is a company.

5. Preparation and Submission of 📄 Form 44, aka Form 67

• 📄 Form 44, aka Form 67, will be available through the assessee’s login.
• The assessee must log in to the Income Tax e-Filing Portal using valid credentials.
• Taxpayers need to access e-File > Income Tax Forms after logging into the portal.
• The required details must be entered, and the form should be submitted using Aadhaar OTP, EVC, or Digital Signature.
• Submission of 📄 Form 44, aka Form 67, must be completed before filing the Income Tax Return.

6. Foreign Tax Credit (FTC) Compliance – Transition from Form 67 to Form 44

Form 67 Applicability

Form 67 will continue to apply up to Financial Year (FY) 2025–26 (Assessment Year 2026–27). Therefore, taxpayers filing their Income Tax Returns (ITRs) during 2026 must submit Form 67 to claim Foreign Tax Credit (FTC).

Form 44 Applicability

Form 44 will apply from Tax Year (TY) 2026–27 onwards. Taxpayers will need to submit Form 44 while filing their ITRs for TY 2026–27 in the year 2027.

FAQ’s

1. What is Foreign Tax Credit (FTC)?
Foreign Tax Credit is a tax relief mechanism that allows an eligible taxpayer to claim credit in India for qualifying taxes paid on income earned from a foreign country, subject to applicable Indian tax laws and DTAA provisions.

2. Who can claim Foreign Tax Credit in India?
A taxpayer who has foreign-source income that is taxable in India and has paid eligible foreign taxes on that income may be able to claim Foreign Tax Credit, subject to the prescribed conditions.

3. What is Form 67?
Form 67 is the prescribed form used by eligible taxpayers to furnish details of foreign income and foreign taxes paid or deducted while claiming Foreign Tax Credit in India.

4. Is Form 67 the same as Form 44?
The form number and terminology used for foreign tax credit compliance should be checked against the latest Income Tax Department rules and e-filing portal for the relevant assessment year. Form 67 has traditionally been associated with FTC claims.

5. Is Form 67 mandatory for claiming Foreign Tax Credit?
Where the applicable rules require Form 67, taxpayers must furnish it in the prescribed manner to claim the corresponding Foreign Tax Credit.

6. Can Form 67 be submitted online?
Yes. Form 67 is generally furnished electronically through the Income Tax Department’s e-Filing portal using the taxpayer’s registered account.

7. When should Form 67 be filed?
The filing deadline depends on the applicable income-tax rules for the relevant assessment year. Taxpayers should check the latest prescribed deadline before submitting the form.

8. What documents are required for claiming Foreign Tax Credit?
Documents may include a foreign tax statement or certificate, proof of foreign tax deducted or paid, details of foreign income, bank or broker statements, and other supporting evidence required under the applicable rules.

9. Can Foreign Tax Credit be claimed for foreign salary income?
Yes. Where foreign salary income is taxable in India and eligible foreign tax has been paid or deducted on the same income, FTC may generally be claimed subject to applicable conditions.

10. Can Foreign Tax Credit be claimed on foreign dividends?
Yes. Foreign tax deducted on eligible dividend income may qualify for FTC, subject to Indian tax law, the applicable DTAA, and the prescribed documentation.

11. Can Foreign Tax Credit be claimed on capital gains from foreign investments?
Yes, where the capital gains are taxable in India and eligible foreign tax has been paid on the same income. The credit is subject to the applicable tax rules and treaty provisions.

12. How is the amount of Foreign Tax Credit calculated?
FTC is generally limited to the amount of foreign tax paid or the Indian tax payable on the corresponding foreign income, as applicable under the prescribed rules and relevant DTAA.

13. Can a taxpayer claim credit for foreign tax that is higher than Indian tax?
Generally, the credit is restricted to the amount permitted under Indian tax law and the applicable DTAA. Excess foreign tax does not automatically become fully creditable in India.

14. Is a DTAA required to claim Foreign Tax Credit?
FTC may be available under the Income Tax Act as well as applicable DTAA provisions. The exact relief depends on the relevant law and treaty between India and the foreign country.

15. Can NRIs claim Foreign Tax Credit in India?
The availability of FTC for an NRI depends on residential status, the source and taxability of the income, the foreign tax paid, and the applicable tax treaty or Indian tax provisions.