Form 67 and Foreign Tax Credit in India for Companies (2026)

Written by CA Nandini, Krystal7 Consultants. Last updated 2 October 2026.

Form 67 is the statement a resident files to claim credit for tax paid abroad. For FY 2025-26 (AY 2026-27), rule 128 of the 1962 Rules still applies, and Form 67 is due by 31 Mar 2027. From tax year 2026-27, Form 67 becomes Form 44 under rule 76 of the Income Tax Rules, 2026. Form 44 is due within 12 months of the tax year end. A chartered accountant must verify it for every company.

This page explains how foreign tax credit works for Indian companies and other residents in 2026. It covers both rule sets, the documents, the computation, disputed tax, and two worked examples with rupee figures.

What is foreign tax credit?

Foreign tax credit (FTC) is a deduction from Indian tax for income tax already paid abroad on the same income. An Indian resident is taxed on worldwide income. When a foreign client or government also taxes that income, India gives credit so the income is not taxed twice. The credit equals the lower of the foreign tax and the Indian tax on that income.

The legal basis has two parts. A treaty with the other country is the first route. The Income Tax Act, 2025 lets the government make such treaties under section 159 (old section 90). Where no treaty exists, section 160 (old section 91) gives unilateral relief.

Rule 76 of the Income Tax Rules, 2026 sets the mechanics. It replaced rule 128 of the Income Tax Rules, 1962 from 1 Apr 2026. Rule 76(1) gives a resident credit for "any foreign tax paid by him" outside India, "by way of deduction or otherwise". The credit falls in the tax year in which the income "has been offered to tax or assessed to tax in India".

Item	Income Tax Act, 1961 (up to AY 2026-27)	Income Tax Act, 2025 (tax year 2026-27 onward)
Treaty relief	Section 90 (and 90A)	Section 159
Relief where no treaty exists	Section 91	Section 160
Procedure rule	Rule 128, Income Tax Rules, 1962	Rule 76, Income Tax Rules, 2026
Statement of foreign income and credit	Form 67	Form 44
Intimation that a foreign tax dispute is settled	No separate form; evidence under the proviso to rule 128(4)	Form 45
Amendment of assessment after a dispute settles	Section 155(14A)	Section 288(1), table serial 7
Minimum alternate tax	Sections 115JB and 115JC	Section 206
Return due dates	Section 139(1)	Section 263(1)

Sources: rule 76 and rule 128 on incometaxindia.gov.in; CBDT form map and the guidance note on Form 44.

"Foreign tax" has a fixed meaning in rule 76(3). For a treaty country, it means the tax the treaty covers. For a country without a treaty, it means a tax that section 160(3) treats as income tax. That definition includes "any excess profits tax or business profits tax charged on the profits by the Government" of that country.

Who files Form 67 and what is it called under the Income Tax Act, 2025?

Any resident that wants credit for foreign tax files the statement. That includes Indian companies, LLPs, firms and resident individuals. For income of FY 2025-26 and earlier years, the form is Form 67 under rule 128. For tax year 2026-27 onward, the form is Form 44 under rule 76. Its title is "Statement of income from a country or specified territory outside India and Foreign Tax Credit".

The department's form map for the 2026 Rules lists Form 44 as the successor to Form 67. The CBDT guidance note on Form 44 points the same way. It lists the major changes "as compared to erstwhile Form No. 67". Our guide to Income Tax Act, 2025 changes for foreign owned companies lists the other renumbered forms.

Non residents do not file Form 44. A foreign company that suffers Indian tax claims credit in its own country, under that country's law. If it wants a lower Indian rate, it files Form 41 instead, as our Form 10F and TRC guide explains.

The transition rule decides which form a given year uses. The CBDT FAQ on interplay and transition (Q4.39) says the portal supports old forms for AY 2026-27 and earlier. New forms apply from tax year 2026-27. So the FY 2025-26 claim goes in Form 67, even though it is filed after 1 Apr 2026.

Income year	Name of the year	Form	Rule	Act
1 Apr 2025 to 31 Mar 2026	Previous year 2025-26, assessment year 2026-27	Form 67	Rule 128, Income Tax Rules, 1962	Income Tax Act, 1961
1 Apr 2026 to 31 Mar 2027	Tax year 2026-27	Form 44 (and Form 45 where needed)	Rule 76, Income Tax Rules, 2026	Income Tax Act, 2025
Any earlier year, through an updated return	The relevant assessment year	Form 67	Rule 128(9) proviso	Income Tax Act, 1961

Source: CBDT, FAQs on Interplay and Transition, Q4.39.

What is the Form 67 due date?

For AY 2026-27, Form 67 is due on or before 31 Mar 2027. Rule 128(9) allows it until the end of the assessment year, if the return is filed under section 139(1) or 139(4). For an updated return under section 139(8A), Form 67 is due on or before the date of that return.

CBDT made this change by Notification No. 100/2022 of 18 Aug 2022 (Income Tax (27th Amendment) Rules, 2022). Before it, Form 67 had to be filed by the return due date. Many websites, and the Form 67 user manual on the income tax portal, still give the old rule. The current text of rule 128(9) on incometaxindia.gov.in reads "on or before the end of the assessment year".

The return still has to be on time. Rule 128(9) works only where the return was filed within section 139(1) or 139(4). CBDT Circular No. 07/2026 of 28 Sep 2026 moved the AY 2026-27 return date for companies without a transfer pricing report. The date went from 31 Oct 2026 to 21 Nov 2026. Companies that file a transfer pricing report keep 30 Nov 2026.

Form 44 due date from tax year 2026-27

Rule 76(12) keeps the same window in new words. Form 44 is due "within twelve months from the end of the relevant tax year". The return must be filed within section 263(1) or 263(4). For tax year 2026-27, that means Form 44 by 31 Mar 2028.

Rule 76(13) covers an updated return under section 263(6)(a). There, Form 44 is due on or before the date the updated return is filed.

Event	AY 2026-27 (Form 67)	Tax year 2026-27 (Form 44)
Return due, company without a transfer pricing report	21 Nov 2026 (Circular 07/2026)	31 Oct 2027, section 263(1)(c)
Return due, company with a transfer pricing report	30 Nov 2026	30 Nov 2027, section 263(1)(c)
Belated return allowed	Section 139(4)	Within nine months of the tax year end, section 263(4): 31 Dec 2027
Last date for the FTC statement	31 Mar 2027, rule 128(9)	31 Mar 2028, rule 76(12)
FTC statement with an updated return	On or before the updated return, rule 128(9) proviso	On or before the updated return, rule 76(13)
Form 45 after a dispute settles	Not applicable	Six months from the end of the month of settlement, rule 76(6)

We still file the statement before the return. The Centralised Processing Centre processes the return against the Form 67 or Form 44 on record. A credit claimed in the return without the form can be denied at processing. Fixing that later costs a rectification request and months of follow up.

Which documents support a foreign tax credit claim?

Rule 76(10) asks for two things. The first is Form 44, verified as the form specifies. The second is a certificate or statement of the income and the tax deducted or paid. That certificate can come from the foreign tax authority, from the person who deducted the tax, or from the taxpayer itself. Rule 128(8) set the same two documents for Form 67.

A self signed statement needs backing. Rule 76(11) requires it to carry an acknowledgement of online payment, a bank counterfoil or a challan. Where tax was deducted, it also needs proof of deduction. The CBDT guidance note adds treaty copies where relevant and dispute details.

Document	Who issues it	Rule	What we check
Form 44 (Form 67 for AY 2026-27)	The Indian taxpayer	76(10)(a); old 128(8)(i)	Each country and each source on its own row
Certificate from the foreign tax authority	The foreign tax authority	76(10)(b)(i)	Taxpayer name and tax identification number match
Withholding certificate from the payer, such as US Form 1042-S	The foreign client or payer	76(10)(b)(ii)	Gross amount, tax withheld, rate and date
Statement signed by the taxpayer	The Indian taxpayer	76(10)(b)(iii)	Must carry proof of payment or deduction, rule 76(11)
Proof of payment (online acknowledgement, counterfoil or challan)	Foreign bank or tax portal	76(11)(a)	Amount and date match the statement
Proof of deduction	The payer	76(11)(b)	Matches the invoice and the bank credit
Copy of the relevant treaty article	Public text	Form 44 guidance note	Article and rate used
Accountant's verification	A chartered accountant in practice	76(16)	Required for every company

Source: rule 76 and the guidance note on Form 44, incometaxindia.gov.in.

We also keep the invoice, the FIRC or bank advice for the net receipt, and the general ledger entry that grosses up the income. Our note on FIRC and EBRC for export of services covers the bank side.

Who must verify Form 44?

Rule 76(16) requires an accountant to verify Form 44 in two cases. The first is where the taxpayer is a company. The second is any other taxpayer whose foreign tax for the tax year equals or exceeds INR 1,00,000. "Accountant" means a chartered accountant holding a certificate of practice, under section 515(3)(b) of the Income Tax Act, 2025.

This is new. Form 67 carried only the taxpayer's own verification under rule 128. The Form 67 user manual describes it as a self declaration under rule 128. From tax year 2026-27, every Indian company claiming even a small credit needs a chartered accountant's sign off.

Rule 76(17) extends the rule to Form 45. Where Form 44 for that year needed an accountant, Form 45 needs one too.

Taxpayer	Foreign tax for the year	Form 67 (AY 2026-27)	Form 44 (tax year 2026-27 onward)
Company	Any amount	Self verified	Verified by a chartered accountant
LLP, firm or individual	INR 1,00,000 or more	Self verified	Verified by a chartered accountant
LLP, firm or individual	Below INR 1,00,000	Self verified	Self verified

Source: rule 76(16) and (17); Form 67 user manual on incometax.gov.in.

The guidance note lists eight portal steps for Form 44 and does not describe how the accountant's verification is captured. Plan for the accountant to review the working, the certificates and the exchange rates before filing. That review takes time, so leave weeks, not days, before 31 Mar.

How is the credit computed?

Rule 76(7) computes the credit separately for each source of income from each country, then adds the results. For each source, the credit is the lower of the Indian tax on that income and the foreign tax paid on it. Foreign tax above the treaty rate is ignored. Foreign currency converts at the SBI telegraphic transfer (TT) buying rate on the last day of the month before the tax was paid or deducted.

Three limits shape every computation.

1. Treaty cap. Rule 76(7)(a) ignores foreign tax above the amount the treaty allows. If a foreign client withholds 30 percent where the treaty allows 15 percent, India credits only 15 percent.
2. Indian tax cap. The credit cannot exceed the Indian tax on that income. Any excess is lost. Rule 76 has no carry forward and no refund of unused credit.
3. What the credit can reduce. Rule 76(4) sets the credit against "tax, surcharge and cess". It cannot reduce interest, fees or penalties.

The exchange rate rule is mechanical. Rule 76(7)(b) uses the TT buying rate on the last day of the month before the month of payment or deduction. Rule 76(18) borrows the meaning from rule 207, which uses the rate the State Bank of India adopts for buying that currency. Old rule 128 used the same test, with the meaning from rule 26.

Step	What to do	Rule
1	List each item of foreign income by country and by source (royalty, service fee, interest, branch profit)	76(7)
2	Convert each foreign tax amount at the TT buying rate on the last day of the month before deduction	76(7)(b)
3	Cut each amount down to the treaty rate where a treaty applies	76(7)(a)
4	Compute Indian tax on that income at the company's rate, including surcharge and cess	76(4), 76(7)(a)
5	Take the lower of step 3 and step 4 for each row	76(7)(a)
6	Add the rows; the total is the FTC	76(7)
7	Where income spreads over years, split the credit in the same ratio	76(2)

Where no treaty applies, section 160 uses rates instead of amounts. The deduction is computed "at the Indian rate of tax or the rate of tax of the said country, whichever is the lower". Section 160(3) defines the Indian rate as Indian income tax divided by total income. The foreign rate is foreign tax actually paid divided by the income assessed there.

Indian tax on the foreign income is the tax on that income as it sits in total income. For a company, that is usually the receipt less expenses that relate to it. The Act does not give a formula for allocating overheads. We allocate direct costs and a reasoned share of common costs, and keep the working with Form 44.

Credit against minimum alternate tax

Rule 76(8) lets the credit reduce minimum alternate tax under section 206 in the same way as normal tax. Rule 76(9) adds a limit. Where the credit against minimum alternate tax exceeds the credit against normal tax, the excess is ignored when computing the later minimum alternate tax credit. Rule 128 had the same pair of rules for sections 115JB and 115JC.

Companies that opted for the lower rate under old section 115BAA (now section 200) do not pay minimum alternate tax. For them, rules 76(8) and 76(9) do not bite. Our page on corporate tax rates in India sets out the regimes.

What if the foreign tax is under dispute?

Rule 76(5) denies credit for any foreign tax, or part of it, that the taxpayer disputes "in any manner". Once the dispute is finally settled, rule 76(6) allows the credit for the original year. The taxpayer must give evidence of settlement, evidence of payment, and an undertaking that no refund of that tax has been or will be claimed. The time limit is six months from the end of the month of settlement.

Form 45 is the new vehicle for this. Rule 76(15) requires an intimation in Form 45, titled "Intimation of settlement of dispute regarding foreign tax for which credit has not been claimed". The CBDT guidance note calls it "a newly introduced form". It also says Form 44 must already be on file for that tax year.

Form 45 has three parts. Part A carries the taxpayer's details. Part B pulls columns 1 to 12 from the Form 44 already filed, and the taxpayer cannot edit them. Part C records the settlement.

The Assessing Officer then amends the assessment or the intimation. The authority is serial 7 of the table in section 288(1) of the Income Tax Act, 2025, which the guidance note also cites. The time limit for that amendment runs from the end of the financial year in which the dispute is settled. Under the 1961 Act, the same power sat in section 155(14A).

Stage	Rule	What happens	Time limit
Foreign tax is disputed	76(5)	No credit for the disputed part	Not applicable
Undisputed part	76(1), 76(10)	Claim in Form 44 as usual	12 months from tax year end
Dispute finally settled	76(6)	Credit allowed for the year the income was taxed in India	Six months from the end of the month of settlement
Intimation	76(15)	File Form 45 with settlement and payment evidence	Same six months
Verification	76(17)	Chartered accountant verifies Form 45 if Form 44 needed one	With the filing
Assessment amended	Section 288(1), table serial 7	Assessing Officer gives the credit	Runs from the end of the financial year of settlement

Source: rule 76; section 288 of the Income Tax Act, 2025; the guidance note on Form 44, which covers Forms 44 and 45.

"Disputed in any manner" is wide. A pending appeal, a refund claim or a competent authority request abroad all count, on our reading. We split the disputed part from the agreed part and claim the agreed part on time.

Can an Indian company claim credit for tax withheld abroad on service income?

Yes, if the foreign country may tax that income under the treaty and the tax is within the treaty rate. Many service fees fall outside that test. Under most of India's treaties, a fee for services performed in India is business profit. Business profit is taxable only in India unless the Indian company has a permanent establishment abroad. Tax a client withholds on such a fee is often not creditable.

The India US treaty shows how the test works. Article 25(2) tells India to credit US tax on income that the treaty lets the US tax. The credit cannot exceed the part of Indian tax attributable to that income. Article 12 lets the US tax royalties and "fees for included services" at up to 15 percent. A fee counts as included only if it makes technical knowledge available, or is ancillary to a royalty.

US domestic law adds a second filter. IRS Publication 515 (2026) treats pay for services performed outside the United States as foreign source income. So a US client paying for work done in India should not withhold US tax on it. Where a US client withholds anyway, the fix is a claim with the IRS, not a credit in India.

The India UK treaty works the same way. Article 13 caps UK tax on royalties and fees for technical services at 15 percent. Article 24(2) gives the Indian resident credit for UK tax, capped at the Indian tax on that income. Our guides to the India US treaty and the India UK treaty set out the articles in full.

Foreign receipt of an Indian company	Typical foreign tax	Creditable in India?	Basis
Royalty from a US licensee for US use	US tax up to the 15% treaty rate	Yes, up to 15% and up to Indian tax on it	India US treaty Articles 12 and 25(2)
Fee for services performed in India for a US client	None under US law	Nothing to credit	IRS Publication 515
Same fee where the US client withheld 30% in error	30% withheld	Doubtful; on our reading the tax is not one the treaty lets the US charge	Article 25(2); rule 76(7)(a)
Royalty from a UK licensee	UK tax up to the 15% treaty rate	Yes, within the cap	India UK treaty Articles 13 and 24(2)
Service fee taxed in a non treaty country	Local withholding or income tax	Yes, under section 160, at the lower of the two rates	Section 160(1)
US state income tax	State tax	Outside the treaty; Article 2(1)(a) covers only federal income taxes	India US treaty Article 2

Sources: India US convention (IRS text); India UK convention (incometaxindia.gov.in); IRS Publication 515 (2026).

Foreign withholding also distorts the export file. The bank credit is net of tax, so the FIRC shows less than the invoice. Record the gross income and the foreign tax separately in the books. Our page on GST on export of services covers the GST side of the same invoice.

What changed in 2026?

The Income Tax Act, 2025 and the Income Tax Rules, 2026 replaced the old law from 1 Apr 2026. The Rules were notified as G.S.R. 198(E) of 20 Mar 2026. Most of rule 128 moved into rule 76 unchanged in substance. Four changes matter for Indian companies.

Topic	Old position (rule 128, Form 67)	New position (rule 76, Form 44)	Effective	Instrument
Form	Form 67	Form 44	Tax year 2026-27	Income Tax Rules, 2026, G.S.R. 198(E) of 20 Mar 2026
Verification	Self verified by the taxpayer	Chartered accountant for every company, and for others with foreign tax of INR 1,00,000 or more	Tax year 2026-27	Rule 76(16)
Due date	End of the assessment year, rule 128(9)	Within 12 months of the tax year end, rule 76(12); same calendar date	Tax year 2026-27	Rule 76(12)
Disputed tax settled	Evidence and undertaking, no prescribed form	Form 45, verified where Form 44 was	Tax year 2026-27	Rule 76(6), (15), (17)
Refund of foreign tax already credited	Form 67 needed only where carry back of loss caused the refund, rule 128(10)	Form 44 needed for carry back, revision of return "or any other reason"	Tax year 2026-27	Rule 76(14)
Section references	Sections 90, 91, 115JB, 115JC, 139, 155(14A)	Sections 159, 160, 206, 263, 288	1 Apr 2026	Income Tax Act, 2025
Exchange rate	TT buying rate, rule 26	TT buying rate, rule 207	1 Apr 2026	Rule 76(18)

Sources: rule 76 and rule 128 on incometaxindia.gov.in; the guidance note on Form 44.

The widened refund rule needs a process. Rule 76(14) applies whenever a foreign refund touches tax already credited in India. A US amended return or a UK repayment can trigger it. We ask clients to tell us about any foreign refund the month it arrives.

The 2022 change still matters for AY 2026-27. Notification No. 100/2022 of 18 Aug 2022 moved the Form 67 deadline from the return due date to the end of the assessment year. Rule 76(12) carries that forward as "twelve months from the end of the relevant tax year".

What happens if Form 67 or Form 44 is filed late or not at all?

The credit can be denied. Rule 76(10) allows credit "on furnishing" Form 44 and the certificate. The return is then processed without the credit. The result is a demand for the tax, with interest under section 424 or 425 (old sections 234B and 234C) where advance tax fell short. No separate penalty applies to the form itself.

Several tribunal benches have allowed credit where Form 67 was filed late. One example is Brinda RamaKrishna v ITO, (2022) 193 ITD 840 (Bangalore Tribunal). A tribunal order does not bind the processing centre that first decides the claim. We do not plan around such orders. File within the rule 76(12) window and argue the tribunal line only if a miss has already happened.

Situation	Consequence	Fix
Form 44 not filed at all	Credit denied at processing; demand with interest	File Form 44 within the 12 month window; seek rectification
Form 44 filed after the window	Credit at risk; department may deny	Appeal; cite tribunal rulings on the directory nature
Return filed after section 263(4) window	Rule 76(12) condition fails	Updated return route, with Form 44 by that return date, rule 76(13)
Foreign tax above treaty rate	Excess ignored	Claim the excess back abroad
Disputed tax claimed in Form 44	Disputed part denied	Remove it; file Form 45 within six months of settlement
No certificate or proof of deduction	Credit denied for that item	Get Form 1042-S or the payer's certificate before filing
Company files Form 44 without an accountant's verification	Form does not meet rule 76(16)	Have a chartered accountant verify and file again within the window

How do Form 44 and the income tax return fit together?

The return claims the credit and Form 44 supports it. For AY 2026-27, ITR-6 for companies carries Schedule FSI (foreign source income) and Schedule TR (tax relief) for this. The figures in the return must match Form 67 to the rupee, country by country. The same match applies to Form 44 and the return for tax year 2026-27.

We see mismatches in three places. The foreign income in the schedule differs from the books because of exchange rates. The credit is claimed under section 159 when the country has no treaty, so section 160 applies. Or the credit sits in the return with no Form 67 on record.

A revised return can add a missed credit. For AY 2026-27, the Finance Act, 2026 extended the revised return window to 31 Mar 2027, with a fee under new section 234-I. The Form 67 deadline is the same day. A company that finds a missed credit in late March has little time left.

Return item	Ties to	Check
Foreign source income by country and head	Form 67 or Form 44, Part B	Same rupee amount
Tax paid outside India	Form 67 or Form 44, Part B	Same amount and the same TT rate
Relief claimed	Lower of foreign tax and Indian tax per row	No row above the Indian tax on that income
Treaty or non treaty route	Section 159 or 160	Country has a treaty in force
Refund of foreign tax	Form 44, Part C	Year of the original credit named

Sources: Form 44 guidance note; ITR-6 for AY 2026-27 on incometax.gov.in.

For the full annual calendar of an Indian company with foreign links, see our compliance calendar for 2026-27.

Worked example

Both scenarios use an Indian company that opted for old section 115BAA, now section 200. Its rate is 22 percent plus a 10 percent surcharge and 4 percent cess, an effective 25.168 percent. The TT buying rates are assumptions for illustration. Use the SBI rate on the actual date.

Scenario 1, royalties from the US and the UK in tax year 2026-27

IndiaCo Private Limited licenses a product design to two foreign customers. A US licensee pays a royalty of USD 1,00,000 in June 2026 and withholds 15 percent, USD 15,000. A UK licensee pays GBP 50,000 in August 2026 and withholds 15 percent, GBP 7,500. Both rates sit within the treaty caps.

IndiaCo allocates INR 10,00,000 of direct and shared costs to the US income and INR 25,00,000 to the UK income. It assumes a TT buying rate of INR 85.00 per USD on 31 May 2026. For GBP it assumes INR 110.00 on 31 Jul 2026. For simplicity it uses the same rates for the income.

Row	US royalty	UK royalty
Gross income in foreign currency	USD 1,00,000	GBP 50,000
Gross income in INR	85,00,000	55,00,000
Less: expenses allocated (INR)	10,00,000	25,00,000
Net income in total income (INR)	75,00,000	30,00,000
Indian tax on net income at 25.168% (INR)	18,87,600	7,55,040
Foreign tax in foreign currency	USD 15,000	GBP 7,500
Foreign tax in INR at the TT rate	12,75,000	8,25,000
Foreign tax within the treaty rate (INR)	12,75,000	8,25,000
Credit: lower of Indian tax and foreign tax (INR)	12,75,000	7,55,040
Foreign tax not credited (INR)	Nil	69,960

Total credit: INR 12,75,000 + INR 7,55,040 = INR 20,30,040.

The UK row shows why the cost allocation matters. Heavy costs against the UK income cut the Indian tax on it to INR 7,55,040. The UK tax of INR 8,25,000 is higher, so INR 69,960 is lost for good. IndiaCo is a company, so a chartered accountant verifies Form 44 under rule 76(16). It files Form 44 before the return due date of 31 Oct 2027, and in any case by 31 Mar 2028.

Now suppose the US licensee had withheld 30 percent, USD 30,000. In INR that is 25,50,000. Rule 76(7)(a) ignores the part above the 15 percent treaty rate. The credit stays INR 12,75,000. IndiaCo must recover the other USD 15,000 from the IRS, through its US adviser.

Scenario 2, a disputed foreign assessment

In tax year 2026-27, IndiaCo also earns a royalty from a second US licensee. The licensee withholds USD 4,000. Later, the IRS assesses a further USD 1,000, which IndiaCo contests. The TT rate assumed is INR 85.00.

Item	USD	INR at 85.00	Treatment
Tax withheld, not disputed	4,000	3,40,000	Claim in Form 44 by 31 Mar 2028
Additional tax assessed, disputed	1,000	85,000	No credit while disputed, rule 76(5)
Dispute settled on 14 Mar 2029; IndiaCo pays	1,000	85,000	Credit for tax year 2026-27, rule 76(6)
Form 45 due	Not applicable	Not applicable	Within six months from 31 Mar 2029, so by 30 Sep 2029

The six months run from the end of the month of settlement. Settlement on 14 Mar 2029 starts the clock on 31 Mar 2029. IndiaCo files Form 45 with the settlement order, proof of payment and the no refund undertaking. A chartered accountant verifies it, because Form 44 for that year needed one. The Assessing Officer then amends the tax year 2026-27 assessment under serial 7 of the table in section 288(1).

Common mistakes

1. Using the Form 67 deadline from older articles. Many pages and the portal's Form 67 manual still say "by the return due date". Fix: work to rule 128(9) and rule 76(12), which run to the following 31 March. File before the return anyway.
2. Filing Form 44 for a company without a chartered accountant. Fix: plan a chartered accountant's review for every company, under rule 76(16).
3. Claiming credit for tax withheld above the treaty rate. Fix: cap each row at the treaty rate under rule 76(7)(a). Claim the excess back abroad.
4. Claiming credit for tax on fees the treaty leaves to India. Fix: test each fee against the business profits and technical fees articles.
5. Pooling all countries in one figure. Fix: compute per source and per country, as rule 76(7) requires.
6. Using the bank credit date exchange rate. Fix: use the rule 76(7)(b) TT buying rate, on the last day of the month before deduction.
7. Claiming credit for disputed tax. Fix: claim only the agreed part, then file Form 45 within six months of settlement.
8. Expecting a refund or carry forward of unused credit. Fix: model the credit against Indian tax on that income before pricing the contract. The excess is a cost.
9. Forgetting a foreign refund. Fix: report any refund of foreign tax already credited in Form 44, Part C, under rule 76(14).
10. Missing the return deadline. Fix: file the return within section 263(1) or 263(4), or the rule 76(12) window does not apply.

Checklist for a foreign tax credit claim

1. List every foreign receipt for the year by country, source and head of income.
2. Collect the withholding certificate, such as Form 1042-S, or the foreign tax authority's certificate for each receipt.
3. Attach proof of payment or deduction to any statement you sign yourself.
4. Separate any disputed foreign tax from the agreed amount.
5. Check the treaty article and rate for each source, or confirm section 160 applies.
6. Convert each foreign tax amount at the SBI TT buying rate for the last day of the previous month.
7. Allocate expenses to each foreign income stream and compute Indian tax on it.
8. Compute the credit per row as the lower of foreign tax and Indian tax.
9. Have a chartered accountant verify Form 44 for a company, under rule 76(16).
10. File Form 44 (Form 67 for AY 2026-27) on the portal before the return.
11. Match Schedule FSI and Schedule TR in the return to the form, row by row.
12. File Form 45 within six months of the end of the month in which a dispute settles.
13. Report any foreign refund of credited tax in Form 44, Part C.

If you want us to review a foreign tax credit working before the return goes in, write to us through our income tax return service.

Frequently Asked Questions

Is Form 67 still used in 2026?+

Yes, for FY 2025-26 income (AY 2026-27). The CBDT transition FAQ Q4.39 says old forms apply for AY 2026-27 and earlier. Form 67 for that year is due by 31 Mar 2027 under rule 128(9). From tax year 2026-27, the form is Form 44 under rule 76 of the Income Tax Rules, 2026.

What is the new number of Form 67?+

Form 67 is Form 44 under the Income Tax Rules, 2026. Its title is "Statement of income from a country or specified territory outside India and Foreign Tax Credit". The CBDT form map lists Form 44 as the successor to Form 67. Form 45 is a new companion form for settled disputes.

Is Form 67 mandatory to claim foreign tax credit?+

Rule 128(8) and rule 76(10) allow credit only on furnishing the form and a certificate of the foreign tax. Some tribunal benches have treated the timing as directory and allowed late forms. Those orders do not bind the processing centre. Treat the form as a condition and file it within the window.

Can Form 67 be filed after the income tax return?+

Yes. Rule 128(9) allows Form 67 until the end of the assessment year, which is 31 Mar 2027 for AY 2026-27, if the return was filed under section 139(1) or 139(4). Rule 76(12) gives Form 44 the same 12 month window. We still file the form first so processing picks it up.

Which return schedules carry foreign tax credit for a company?+

For AY 2026-27, ITR-6 reports foreign income in Schedule FSI and the relief claimed in Schedule TR. Both must match Form 67 country by country. The credit claimed cannot exceed the lower of foreign tax and Indian tax on each row, as rule 128 and rule 76(7) require.

Does a company need a chartered accountant for Form 44?+

Yes. Rule 76(16) requires every company's Form 44 to be verified by an accountant, meaning a chartered accountant in practice under section 515(3)(b) of the Income Tax Act, 2025. For other taxpayers, verification is needed when foreign tax for the year reaches INR 1,00,000. Form 67 had no such requirement.

Which exchange rate applies to foreign tax credit?+

The SBI telegraphic transfer buying rate on the last day of the month before the month in which the tax was paid or deducted. Rule 76(7)(b) sets this, with rule 207 defining the rate. Old rule 128 used the same test with rule 26. Do not use the rate on the date the money reached India.

Is unused foreign tax credit refunded or carried forward?+

No. Rule 76(7)(a) caps the credit at the Indian tax payable on that income. Any foreign tax above that is lost. Rule 76 has no carry forward. Where foreign tax exceeded the treaty rate, the taxpayer must reclaim the excess from the foreign tax authority.

Can foreign tax credit reduce interest or late fees?+

No. Rule 76(4) allows the credit against tax, surcharge and cess only. Interest, fees and penalties stay payable in full. So interest under sections 424 and 425 (old 234B and 234C) on a shortfall in advance tax still applies if the credit was not counted when paying advance tax.

Can foreign tax credit be set against minimum alternate tax?+

Yes. Rule 76(8) allows the credit against minimum alternate tax under section 206 as against normal tax. Under rule 76(9), any credit against minimum alternate tax above the credit against normal tax is ignored for the later minimum alternate tax credit. Companies under section 200 (old 115BAA) do not pay it.

Is credit available for US state income tax?+

Not under the treaty route. Article 2(1)(a) of the India US treaty covers only US federal income taxes. Rule 76(3)(a) limits treaty route foreign tax to taxes the treaty covers. Section 160 applies only to countries without a treaty, so its route does not help with the US either, on our reading.

What is Form 45 under the Income Tax Rules, 2026?+

Form 45 is the intimation that a foreign tax dispute has been settled. Rule 76(15) requires it to claim credit for tax that was disputed and left out of Form 44. It is due within six months from the end of the month of settlement, with evidence of payment and a no refund undertaking.

Does a non resident file Form 67 or Form 44?+

No. Rule 76(1) gives credit only to a resident. A non resident that wants a lower Indian withholding rate under a treaty files Form 41 (old Form 10F) with a tax residency certificate under section 159(8). It claims credit for Indian tax in its home country.

How is foreign tax credit worked out where there is no treaty?+

Section 160 of the Income Tax Act, 2025 (old section 91) applies. The resident deducts tax on the doubly taxed income at the lower of the Indian rate and the foreign rate. The Indian rate is Indian tax divided by total income. The foreign rate is foreign tax paid divided by income assessed abroad.

What if income is taxed in India over two or more years?+

Rule 76(2) splits the credit across those tax years in the same ratio as the income is offered to tax in India. If 60 percent of a contract's income falls in tax year 2026-27 and 40 percent in 2027-28, the credit follows the same 60 and 40 split.

What happens if the foreign tax is later refunded?+

Rule 76(14) requires a fresh Form 44 when a foreign refund touches tax already credited in India. The trigger can be a loss carry back, a revised foreign return or any other reason. Part C of Form 44 records the reason, the refund amount and the year of the original credit.

Sources

• Income Tax Department, Rule 76 of the Income Tax Rules, 2026 (foreign tax credit), read 2 Oct 2026, https://www.incometaxindia.gov.in/w/rule-76-3
• Income Tax Department, Guidance note on Form No. 44 and Form No. 45, read 2 Oct 2026, https://www.incometaxindia.gov.in/documents/d/guest/fn-44
• Income Tax Department, FAQs and Guidance Notes on Forms as per Income Tax Rules, 2026 (form map), read 27 Sep 2026, https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026
• Income Tax Department, Rule 128 of the Income Tax Rules, 1962, read 2 Oct 2026, https://www.incometaxindia.gov.in/w/rule-128-1
• CBDT, Notification No. 100/2022, G.S.R. 636(E), Income Tax (27th Amendment) Rules, 2022, 18 Aug 2022, https://www.incometaxindia.gov.in/w/notification-no.-100/2022-f.-no.-370142/35/2022-tpl-/-gsr-636-e-income-tax-27thamendment-rules-2022
• Income Tax Department, Section 159 of the Income Tax Act, 2025, https://www.incometaxindia.gov.in/w/section-159-89
• Income Tax Department, Section 160 of the Income Tax Act, 2025, https://www.incometaxindia.gov.in/w/section-160-84
• Income Tax Department, Section 263 of the Income Tax Act, 2025, https://www.incometaxindia.gov.in/w/section-263-72
• Income Tax Department, Section 288 of the Income Tax Act, 2025 (table serial 7), read 2 Oct 2026, https://www.incometaxindia.gov.in/w/section-288-74
• Income Tax Department, Section 515 of the Income Tax Act, 2025, https://www.incometaxindia.gov.in/w/section-515-1
• CBDT, FAQs on Interplay and Transition, Q4.39, 2026, https://www.incometaxindia.gov.in/documents/81799/11848482/FAQs-on-Interplay-and-Transition.pdf/05f80c1a-073c-a5d7-fb6f-55509242be53?t=1774082865717
• CBDT, Circular No. 07/2026, 28 Sep 2026, https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-09/Circular-7-2026.pdf
• Income Tax Department filing portal, Form 67 user manual, https://www.incometax.gov.in/iec/foportal/help/statutory-forms/popular-form/form67-um
• Internal Revenue Service, Convention between the United States and India (1989), https://www.irs.gov/pub/irs-trty/india.pdf
• Internal Revenue Service, Publication 515 (2026), https://www.irs.gov/publications/p515
• Income Tax Department, India UK comprehensive agreement, https://www.incometaxindia.gov.in/w/uk-comprehensive-agreements-1