When you earn income abroad that India also taxes — because you are a resident taxed on worldwide income — the same income can be taxed in two countries. Foreign tax credit (FTC) is the relief that prevents this double taxation by letting you set off the tax paid overseas against your Indian tax on the same income. Form 67 is the document through which you claim it. Here's how the mechanism works and what you need to do.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
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If you have paid tax abroad on income that India also taxes, foreign tax credit prevents you being taxed twice. Form 67 is how you claim it. Here's how the relief works.
A resident of India is generally taxed on global income, which can include salary, interest, dividends or business income earned in another country. If that other country has already taxed the same income, you would otherwise pay twice. Foreign tax credit resolves this by allowing the foreign tax to be credited against your Indian tax liability on that income. It is the practical expression of double-taxation relief, often working alongside a tax treaty between India and the source country.
Where India has a tax treaty (a Double Taxation Avoidance Agreement) with the country where the income arose, the treaty governs how relief is given and may set the framework for the credit. Even without a treaty, domestic provisions can allow unilateral relief in many cases. The treaty can affect how much of the foreign tax is creditable and how particular types of income are treated, so the country involved and the nature of the income both matter when working out your claim.
Foreign tax credit is not unlimited — broadly, the credit is the lower of the foreign tax paid on the income and the Indian tax attributable to that same income. In other words, you cannot get back more than India would have charged on that income, even if the foreign country taxed it at a higher rate. The computation is done income by income, and the figures depend on exchange rates and the way the foreign tax was levied, so the calculation needs care.
To claim foreign tax credit you file Form 67 on the income-tax portal. In it you give details of the foreign income and the foreign tax paid, supported by evidence such as a certificate or statement of the tax paid abroad and proof of the income. Form 67 is the formal step that links your overseas tax payment to your Indian return, so the supporting documents need to be in order before you file. Keep your foreign tax statements and payment proofs organised through the year.
Claiming foreign tax credit is timing-sensitive: Form 67 is expected to be filed in connection with your return, so leaving it to the last moment risks losing or delaying the credit. Currency conversion, matching the foreign income to the right Indian head, and reading the relevant treaty all add complexity. Because mistakes can mean you either lose relief or claim more than allowed, this is an area where it pays to plan ahead and, for anything substantial, get professional help.
It is relief that lets a resident set off tax paid abroad against Indian tax on the same income , so the income is not taxed twice. It applies because a resident is generally taxed on worldwide income, and it often works alongside a tax treaty between India and the country where the income arose.
Broadly, the credit is the lower of the foreign tax paid on the income and the Indian tax attributable to that same income. You cannot recover more than India would have charged on that income, and the computation is done income by income, affected by exchange rates and how the foreign tax was levied.
You file Form 67 on the income-tax portal in connection with your return , giving details of the foreign income and tax paid, supported by evidence of the tax paid abroad. Because it is timing-sensitive, file it on time and keep your foreign tax statements and proofs organised.
Earned income abroad and worried about being taxed twice? Write to the firm with your foreign income and tax details and we'll work out your credit and file Form 67 for you.