Moment guide · FY 2026-27

I am claiming foreign tax credit via Form 67

How do I claim foreign tax credit in my Indian return?

Sec 90Sec 91Sec Rule 128Sec 139Verified 2026-08-11

Foreign tax credit is claimed by filing Form 67 before the ITR due date — filing it late means the credit is lost even in a revised return. The credit is the lower of the foreign tax paid and the Indian tax on that income, converted at the SBI TT buying rate, and where both the DTAA and domestic law allow relief, the more beneficial one applies.

Your legitimate options

Every route the statute actually gives you — with its condition, cap and deadline.

Route	Condition	Cap / deadline
Form 67 before the due date	File Form 67 on the income-tax portal before the ITR due date; the credit is claimed against the same income in the return	Cannot be claimed retroactively in a revised return filed later
Credit limited to Indian tax	The credit is the lower of the foreign tax paid and the Indian tax on that income	Credit cannot exceed Indian tax on the foreign income
Currency conversion	Convert foreign tax at the SBI TT buying rate on the date it was paid	DTAA vs domestic law — the better of the two applies

The #1 trap

Filing Form 67 late — the foreign tax credit is available only if Form 67 is filed before the ITR due date, and a revised return filed later cannot revive it. The other common miss: claiming the full foreign tax when the credit is capped at the Indian tax on that income, and converting at the wrong (selling) rate instead of the SBI TT buying rate.

The decision path

Follow it top to bottom — the first condition that matches is your answer.

IF you paid foreign tax on income also taxed in India → file Form 67 before the ITR due date.
IF you file Form 67 after the due date → the credit cannot be claimed, even via a revised return.
IF the foreign tax exceeds the Indian tax on that income → the credit is capped at the Indian tax.
IF you convert the foreign tax → use the SBI TT buying rate on the date the foreign tax was paid.
IF the DTAA gives relief beyond domestic law → the more beneficial provision applies under section 90. [VERDICT: Form 67 before the deadline — the credit dies with delay.]

Worked example

Karan, software developer with US salary income

Karan worked in the US for part of the year and pays $6,000 of US federal tax on salary that is also taxable in India. He files his Indian ITR on 15 July 2026, well before the 31 July due date, and first submits Form 67 on the income-tax portal, because Rule 128 requires the foreign tax credit to be claimed through Form 67 filed before the ITR deadline. His foreign tax of $6,000 converts at the SBI TT buying rate of ₹85.5 per dollar on the date of payment, giving ₹5,13,000. The Indian tax on the same salary is ₹4,80,000, so his credit is limited to the lower amount, ₹4,80,000 — he cannot use the extra ₹33,000. If Karan had filed his return on 20 August without Form 67, the credit would be unavailable, and a revised return filed later could not revive it, because the FTC rule is strict about the pre-due-date filing. His colleague with salary taxed in the UK compares the India-UK DTAA relief with the domestic unilateral relief under section 91 and claims the better of the two. Karan keeps the US tax return, the foreign tax payment receipts and the conversion workings, because the assessing officer asks for them in scrutiny. The credit is claimed in the same ITR schedule where the foreign income is reported, and the tax payable in India is reduced by the ₹4,80,000 credit. A quick call with us dials in the final figure. Karan also verifies that Form 67 lists each foreign country and each source of income separately, because the credit is claimed country by country and income head by income head, and the Indian tax on each source is the ceiling for that country's credit. If the foreign tax was paid in a different year than the income, the credit follows the year of the foreign tax payment, which can create a mismatch he reconciles in the return. The SBI TT buying rate is applied on the date the foreign tax was paid, and he keeps the bank's rate certificate for the conversion. If he also has foreign capital gains, the credit is computed on the Indian tax on those gains separately, and an excess credit from one head cannot be used against another head. A quick call with us dials in the final figure.

Questions people actually ask

When must Form 67 be filed?

Form 67 must be filed before the ITR due date for the year. Filing it late means the foreign tax credit cannot be claimed, even in a revised return.

How is the foreign tax credit calculated?

The credit is the lower of the foreign tax paid and the Indian tax on that same income, converted at the SBI TT buying rate on the date of payment.

Can I claim both DTAA and domestic relief?

You claim the more beneficial of the DTAA relief and the domestic unilateral relief under section 91 — not both.

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Sections: 90, 91, Rule 128, 139 · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).