NRI Tax Filing 2026: March 31 Cutoff To Claim Foreign Tax Credit Via Form 67

Indians employed in foreign jurisdictions often face tax obligations in those countries. To ensure such income is not taxed again domestically, India offers a foreign tax credit mechanism. This concession is subject to the condition that Form 67 is filed on time as per the Income Tax Rules, 2025.

Submitting Form 67 before the ITR deadline is a prerequisite for availing foreign tax credit (FTC). Missing this cut-off can lead to litigation with the tax department, although a handful of taxpayers have prevailed in appeals before the Income Tax Appellate Tribunal (ITAT). Experts maintain that timely compliance is the best course to ensure relief and prevent dual taxation.

For Indians working abroad, income taxed in another country can qualify for relief in India under FTC rules. However, the availability of this benefit is contingent on the taxpayer's residential status and whether a Double Taxation Avoidance Agreement exists with the foreign jurisdiction.

According to India's tax framework, taxpayers must submit Form 67 by the end of the applicable assessment year. For those declaring income from the 2024-25 financial year, the deadline to file is March 31, 2026.

Taxpayers claiming FTC are required to file their income tax returns within the designated time frame. Submitting Form 67 ahead of the return is considered prudent, as it helps avert automatic tax claims during processing.

Taxmann Research points to March 31, 2026 as the last date for uploading statements of foreign income subjected to tax, along with details of taxes paid or deducted in FY 2024–25. Filing this information through Form 67 is a prerequisite for claiming foreign tax credit in returns under Sections 139(1) and 139(4) of the Income-tax Act, 1961.

Under Section 5 of the Income-tax Act, individuals classified as resident and ordinarily resident (ROR) are liable to tax in India on their worldwide income, including earnings from employment abroad. Where such income has already been taxed overseas, relief mechanisms are required to prevent double taxation.

Unlike ROR taxpayers, those falling under non-resident (NR) or resident but not ordinarily resident (RNOR) status are liable to tax in India solely on income sourced within the country. Foreign earnings already taxed abroad are not subject to Indian taxation, and therefore do not necessitate an FTC.

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Where a DTAA exists between India and a foreign jurisdiction, including nations like the US, UK, UAE and Singapore, the framework for relief is outlined in Section 90 in conjunction with the applicable treaty clause on double taxation. In such scenarios, taxpayers are entitled to claim FTC in India, limited to the domestic tax liability on the same income. However, availing of these benefits requires submission of documents such as a Tax Residency Certificate (TRC) and Form 10F in line with Section 90(4).

Even in the absence of a tax treaty, the Income-tax Act, 1961, allows for relief under Section 91, which grants unilateral relief to taxpayers. This enables residents to claim a deduction from Indian taxes, based on whichever is lower (the Indian rate applicable to the foreign income or the foreign tax rate paid) on income that has been taxed in both countries.

Rule 128 of the Income-tax Rules, 1962, governs the procedure for claiming FTC, regardless of whether relief is availed under Section 90 or Section 91. It stipulates that the credit be computed separately for each jurisdiction and each category of income, and limited to the Indian tax payable on that portion. 

Taxpayers must also file Form 67 electronically before the close of the relevant assessment year, providing details of overseas income, taxes paid and supporting documents.

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