Form 67 of the Income Tax Act Explained

What is Form 67 of the Income Tax Act?

Form 67 of the income tax act is a form that every assessee who wishes to claim foreign tax credit needs to furnish while filing the ITR under section 139(1). A foreign tax credit can be availed of by any assessee who earns money outside India and is liable to pay tax in both countries. Form 67 is an important document that needs to be filed to claim a deduction of foreign tax paid in the home country.

Foreign Tax Credit and Form 67

As mentioned above, Form 67 is an essential document for every resident taxpayer who is eligible to claim a foreign tax credit or FTC on any income received outside the country.

The foreign tax credit is a facility provided by the Indian government that allows you to claim relief or credit of the tax paid on the income earned outside India.

Suppose you are an Indian resident having foreign assets or any other foreign source of income, either in the form of salaries, interests, dividends, etc. In that case, you can claim a refund of the tax paid in the source country by filling Form 67 of the Income Tax Act.

Documents required to be furnished for claiming FTC

In accordance with Rule 128, in order to claim FTC, the taxpayer is required to file the following documents on or before the due date of filing of return:

1. 1. A statement of :
   • foreign income offered to tax
   • foreign tax deducted or paid on such income in Form No. 67
2. 2. Certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the taxpayer :
   • From the tax authority of the foreign country
   • from the person responsible for the deduction of such tax
   • signed by the taxpayer
3. 3. Proof of payment of taxes outside India.

Components of Form 67

Now that you know what form 67 is, let us understand its components in detail -

• Part A - Part A of Form 67 of the Income Tax Act consists of the basic details of the assessee, such as Name, PAN or Aadhaar number, address of the assessee, assessment year, and the details of the type of income received and the foreign tax credit claimed. You can fill in all these basic details and move on to the next part of the form, i.e., Part B.
• Part B - In part B, you have to furnish the details of any refund of foreign tax claimed in the previous year due to carry backward of losses. It also requires the assessee to furnish the details of any foreign tax credit claimed on the disputed tax amount.
• Verification - This section consists of a self-declaration form in conformity with the Rule 128 of the Income Tax Act. It consists of the assessee's name, PAN, declaration, place, and date of filling out the form.
• Attachments - Once you have filled in the above parts, the last section requires you to attach the proof or the statement of the tax payment or any tax deducted. Before attaching the document, read the instructions carefully and make sure the document conforms with the rules.

Form 67 due date for AY 2023-24

The Central Board of Direct Taxes (CBDT) revised Rule 128 to provide that Form 67 can be filed on or before the end of an assessment year if the return of income for that year was filed within the time stipulated in Section 139(1) or Section 139(4).

If the assessee has filed an updated return under Section 139(8A), Form 67 (related to income included in the updated return) must be filed on or before the date of filing of the updated return.

The modification takes effect on April 1, 2022, and so applies to all FTC claims submitted during the fiscal year 2022-2023.

How to File Form 67 of the Income Tax Act?

To file form 67 -

• The taxpayers who are required to file their ITR online must prepare Form 67 and submit it online.
• The taxpayer should submit Form 67 either before the due date or on the due date of the filing ITR.
• You can access Form 67 of the Income Tax Act on the dashboard of your e-filing portal.
• You also need to provide a Digital Signature Certificate or an Electronic Verification Code to submit Form 67.

Step-by-step Process of Filling Form 67

• Step 1. Use your Id and Password to log in to the e-filing portal.
• Step 2. Select e-file > Income Tax Forms > File Income Tax Forms
• Step 3. Select ‘Form 67’
• Step 4. Select A.Y. and click ‘continue.’
• Step 5. Click ‘Let’s get started’ on the instructions page.
• Step 6. Once Form 67 is displayed, click ‘Preview.’
• Step 7. Verify the details and click e-verify.
• Step 8. Click ‘Yes’ and submit the form.
• Step 9. The e-verification page appears. A success message along with the acknowledgment number and transaction ID. Note the acknowledgment number for the future.

Worrying about paying taxes twice is a matter of the past. The introduction of Form 67 of the income tax act has made it easy to prevent double taxation and avail of the benefit of the Foreign Tax Credit. Filing Form 67 yourself can be a little tedious and time-consuming. Don't Worry! Hire a CA now and get a smooth and hassle-free ITR filing experience. If you need any tax-related assistance to manage your taxes, simply book a Tax Advisory Service for consultation.