Who has to file Form 67 with an Indian return?
The Indian resident claiming the credit. Form 67 is the statement of foreign income and foreign tax paid that supports a foreign tax credit claim in your own return, so it is your filing, not your foreign employer or your foreign bank. That has a practical consequence: the evidence the statement rests on sits with other people, in another country, on another year timetable, and you have to have collected it before the Indian return is prepared. Anyone with foreign salary, dividends, interest, gains or business profits that were taxed abroad is in scope.
Do I need Form 67 if the foreign tax was only withheld at source?
Yes. Tax withheld from a foreign salary, dividend or interest payment is foreign tax paid, and a claim for credit on it has to be substantiated like any other. Never having written a cheque to the foreign authority makes no difference to the claim, though it does change the evidence: you are relying on the payer statements and on the foreign assessment rather than on your own payment records. Get both, because a withholding figure that is later adjusted on assessment abroad changes the amount properly creditable.
How do I match foreign tax to the Indian tax year on Form 67?
By mapping, not by copying. The Indian tax year does not line up with most other countries, so a foreign annual summary straddles Indian years and cannot simply be transcribed. The workable method is to go back to periodic records, such as payslips, dividend advices, interest statements and the payer deduction reports, and allocate the income and the tax attaching to it to the Indian year each fell in. Where the foreign tax is finally settled on an assessment covering a different span, you also need to show how the assessed figure was apportioned.
Does Form 67 cover foreign capital gains as well as salary?
It covers foreign income that was taxed abroad, which includes gains, dividends, interest and business profits as well as employment income. The reason to keep the sources apart rather than pooling them is that a credit is worked out by reference to the income it attaches to, so the statement has to show which foreign tax belongs to which foreign income. Pooling a year of foreign tax against a year of foreign income hides the cases where one source carried tax abroad and another did not, and that is where claims come unstuck.
What if the foreign tax is refunded after I have claimed the credit?
Then the credit claimed was too high and the Indian position has to be put right. A credit follows the foreign tax finally borne, not the amount withheld or the amount first assessed, so a refund, an objection allowed or a reassessment abroad all feed back into the Indian claim. Keep the foreign matter and the Indian claim linked in your own records, because nobody abroad will tell India that a refund has been issued, and discovering it years later is worse than correcting it when it happens.
Can I claim credit for foreign tax I have not yet paid?
The statement is of foreign tax paid, so an amount still in dispute or not yet borne is not ready to support a claim. This bites where a foreign assessment is under objection or appeal. The sensible course is to decide deliberately whether to claim on the amount borne so far and revisit it when the foreign matter is settled, and to record the reasoning either way. What causes trouble is claiming the disputed figure without saying so, then having no explanation when the foreign outcome turns out differently.
How does an NRI prove residence to get the treaty rate?
With a tax residency certificate issued by the country you are resident in, plus Form 10F giving the details the certificate does not carry, plus a PAN in the payer's records. The certificate has to cover the period of the payment, and the payer needs it before paying, not afterwards. Missing any of the three and the deductor is obliged to withhold at the domestic rate, which turns a rate reduction into a refund claim. See TRC against Form 10F.
What is a DTAA?
Double Taxation Avoidance Agreement — India's name for a tax treaty. It does the same work as any treaty: allocates taxing rights between India and the other country, caps Indian withholding on payments abroad, and sets out whether relief comes by exemption or by credit. To use one you generally need a tax residency certificate from the other country, Form 10F, and a PAN in the deductor's records. See DTAA relief between India and Canada.
