Form 67: Claiming Tax Relief Under DTAA

Form 67 is a declaration containing Statement of income from a country or specified territory outside India and Foreign Tax Credit.

Rule 128 of the Income Tax Rules, 1962, a resident tax payer can claim credit for the foreign taxes paid. The credit shall be allowed only if the assessee furnishes details in Form 67 within the stipulated time.

Form 67 will also be required to be furnished in case the carry backward of loss of the current year results in refund of foreign tax for which credit has been claimed in any earlier previous years.

This form can only be filed through online mode using e-Filing portal.

What is Double Taxation Avoidance Agreement (DTAA)?

A DTAA is a unilateral/ bilateral/ multilateral agreement between two or more countries to eliminate double taxation of income or gains arising in one country and paid to the persons of another country.

Prerequisites/ Documents for availing such credit

• Assessee must be registered on the e-Filing portal with user ID and password
• PAN and Aadhaar of the assessee must be linked
• Status of the PAN should be ACTIVE
• Statement of Foreign Income
• Form10F for Indian Tax Authorities to be filed with TRC
• Tax Residency Certificate (TRC) which will be valid for a single financial year
• Proof of tax payment

Tax Relief Mechanisms as per DTAA Provisions

To avoid such double taxation on the same income, India has established the DTAA agreement with over 94 countries. This has been done for fair and equitable system for allocation of income between the countries and to prevent tax evasion.

Section 90, 90A, 91 of Chapter IX under Income Tax Act, 1961 talks about Foreign Tax Credit where one can claim such credit to avoid any double taxation. Detailed explanation is given below:

Section 90

The Central Government may get into a DTAA agreement with foreign countries or specified territories outside India to grant relief of tax to the assessees who have foreign income.

Section 90A

A specified association in India may get into a DTAA agreement with a specified association in a specified territory outside India to grant relief of tax to the assessees who have foreign income.

Section 91

Countries where no such agreement exists- the assessee shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal.

In addition to this, Form 10F (mandatory for all non-resident tax payers irrespective of whether they possess PAN or not) shall also be filed to claim tax credit following the DTAA. There are two section in this form :

• Astatement made by the non-resident or foreign entity
• Certification by the tax authority in the resident country.

Due Date for availing such credit

To avail foreign tax credit, Form 67 must be filed on or before March 31, 2025 for FY 2023-24 (AY 2024-25).

How to file Form 67?

• Login to Income Tax Portal with User ID and password
• Under e-file section, click onto Income Tax Forms
• Under sub-heading Persons not dependent on any Source of Income(Source of Income not relevant) search for Form 67.
• This has 4 sections namely:

PART-A

Basic information such as your Name, PAN or Aadhaar, Address and Assessment Year. Assessee is also required to the add the receipt details of the income from a country or specified territory outside India and Foreign Tax Credit claimed.

PART-B

Assessee is required to provide details of refund of foreign tax as result of carry backward of losses and disputed foreign tax

Verification

The Verification section contains a selfdeclaration form containing fields as per Rule 128 of the Income Tax Rules, 1962.

Attachments

The last section of Form 67 is Attachments where you need to attach a copy of the certificate or statement and proof of payment / deduction of foreign tax.

Final Word

To prevent double taxation on the same income, it is advisable to look into the sections mentioned above and to file required forms within the stipulated time period to claim benefits on foreign earnings.

Recently, tribunals have allowed late filings of Form 67, even though the same is not allowed under the Income Tax Act

FAQs