Form 44 under the Income Tax Act, 2025 (formerly Form 67 under the Income Tax Act, 1961) is required before claiming Foreign Tax Credit (FTC) while filing a return as a Resident and Ordinarily Resident (ROR) or during an RNOR period. Since claiming FTC involves important compliance requirements, taxpayers should understand the applicable process and key conditions.
1. Background
Taxation is an important factor when making investment and business decisions involving foreign countries. With globalization, the tax policies of one country can have a direct impact on economic activities in another country. This has increased the need to evaluate different tax systems and introduce appropriate reforms.
2. Double Taxation
Double taxation may arise when a taxpayer is resident in one country but earns income from a source located in another country. This happens because both the country of residence and the country where the income arises may have the authority to tax the same income.
The two fundamental principles are:
- Source Rule: Under this principle, income is taxable in the country where it arises, regardless of whether the taxpayer is a resident or non-resident of that country.
- Residence Rule: Under this principle, the right to tax income rests with the country where the taxpayer is a resident.
When both principles apply to the same taxpayer and income, the same income may effectively be taxed twice. To address this issue, the Income Tax Act provides provisions for double taxation relief.
3. Foreign Tax Credit
A resident taxpayer may claim credit for foreign taxes paid in another country or specified territory, subject to the applicable provisions. The credit is generally available in the year in which the corresponding foreign income is offered to tax in India.
4. Form 44, Also Known as Form 67
Form 44, formerly known as Form 67, is the statement required to be submitted by a taxpayer for claiming Foreign Tax Credit for taxes paid in another country.
Taxpayers seeking credit for foreign taxes paid are required to prepare and submit Form 44 (Form 67) online along with their income tax return, subject to the applicable rules.
Key Requirements Under the Income Tax Rules, 2026
The following changes apply to Form 44 (Form 67):
- Foreign Tax Identification Number (TIN) Mandatory: The TIN issued by the foreign country is mandatory in Form 44 (Form 67) with effect from April 1, 2026.
- Accountant Verification: Verification by an accountant is required where:
- The Foreign Tax Credit claimed exceeds ₹1 lakh, or
- The taxpayer is a company.
5. Preparation and Submission of Form 44, Also Known as Form 67
- Form 44 (formerly Form 67) is available through the taxpayer’s income tax e-filing account.
- The taxpayer must log in to the Income Tax e-Filing portal using valid credentials.
- After logging in, navigate to e-File > Income Tax Forms.
- Enter all the required information and submit the form using Aadhaar OTP, EVC, or Digital Signature, as applicable.
- Form 44 (Form 67) must be submitted 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 during 2026 and claiming Foreign Tax Credit (FTC) must submit Form 67.
Form 44 Applicability
Form 44 will apply from Tax Year (TY) 2026–27 onwards. Taxpayers claiming Foreign Tax Credit for TY 2026–27 will be required to submit Form 44 while filing their Income Tax Return in 2027.
FAQ’s
1. What is Foreign Tax Credit (FTC)?
Foreign Tax Credit allows an eligible taxpayer to claim credit in India for taxes paid on income earned in a foreign country, subject to the applicable provisions of the Income Tax Act and relevant DTAA.
2. Who can claim Foreign Tax Credit in India?
A taxpayer who has paid or suffered foreign tax on income that is also taxable in India may be eligible to claim FTC, subject to applicable conditions and documentation requirements.
3. What is Form 67 used for?
Form 67 is used by eligible taxpayers to provide details of foreign income and foreign taxes paid or deducted and to claim Foreign Tax Credit in India.
4. Is Form 67 mandatory for claiming Foreign Tax Credit?
Yes, where Form 67 is prescribed for claiming FTC, the taxpayer needs to furnish it in the prescribed manner and within the applicable time limit.
5. What is Form 44 in relation to Form 67?
If your article refers to the updated Income Tax Department form numbering, Form 67 should be identified according to the applicable rules and e-filing portal for the relevant assessment year. Taxpayers should verify the current form name and number before filing.
6. When should Form 67 be submitted?
Form 67 should generally be furnished electronically within the prescribed timeline for claiming FTC. The applicable deadline should be checked for the relevant assessment year because tax rules and filing procedures can change.
7. Can Form 67 be filed online?
Yes. Form 67 can be submitted electronically through the Income Tax Department’s e-Filing portal using the taxpayer’s login credentials.
8. What documents are required to claim Foreign Tax Credit?
Documents may include a foreign tax statement, tax deduction certificate, foreign tax payment proof, income statement, and other evidence establishing the foreign income and tax paid.
9. Can FTC be claimed for tax deducted from foreign dividends?
Yes, subject to the applicable provisions and DTAA. Foreign tax deducted from eligible dividend income may qualify for FTC to the extent permitted under Indian tax law.
10. Can a taxpayer claim FTC for foreign salary income?
Yes. If foreign salary income is taxable in India and foreign tax has been paid on the same income, FTC may generally be available subject to the applicable rules and documentation.
11. Is Foreign Tax Credit available under a DTAA?
Yes. Where India has a DTAA with the foreign country, FTC may be available in accordance with the relevant treaty and applicable Indian tax provisions.
12. How much Foreign Tax Credit can be claimed?
FTC is generally subject to prescribed limits and cannot ordinarily exceed the Indian income tax payable on the corresponding foreign income, subject to the applicable provisions.
13. Can FTC be claimed if the foreign tax is higher than the Indian tax?
Generally, the credit is restricted to the amount permitted under Indian law and the applicable DTAA. Any excess foreign tax may not automatically be available as a credit against Indian tax.
14. Can NRIs claim Foreign Tax Credit in India?
The availability of FTC depends on the taxpayer’s residential status, the nature of income, where the income is taxable, and whether foreign tax has been paid on income that is also taxable in India.
15. What happens if Form 67 is not filed?
Failure to comply with the prescribed Form 67 requirements may affect the taxpayer’s ability to claim Foreign Tax Credit. The applicable rules and filing deadlines should be carefully followed.
