Archive · 1 Jul 2025
How to Claim FTC and Manage Your Taxes While Working Abroad
If you work in another country and pay taxes there, you might also have to pay taxes in India.
To avoid paying taxes twice on the same money, you can use something called the Foreign Tax Credit (FTC).
You need to fill out Form 67 and file it before your tax return.
FTC allows you to reduce your Indian taxes by the amount you paid in foreign taxes, but not more than what you would owe in India.
Make sure to include the right documents, like proof of taxes paid, to ensure you don't miss out on this benefit.
Failing to follow the rules can lead to paying more taxes than you should.
Indian residents earning abroad can avoid double taxation using the Foreign Tax Credit (FTC).
Claiming FTC requires Form 67, filed before the Income Tax Return (ITR).
FTC allows claiming the lower of taxes paid abroad or taxes payable in India on the same income.
Only specific taxes like income tax, surcharge, and health/education cess qualify for FTC.
Errors such as late filing or incorrect documentation can lead to loss of tax benefits.
- Who
- Indian residents earning income abroad.
- What
- The Foreign Tax Credit (FTC) allows Indian residents to avoid double taxation on income earned abroad.
- When
- Form 67 must be filed before submitting the Income Tax Return.
- Where
- The FTC applies to income earned in foreign countries by Indian residents.
- Why
- To prevent double taxation on the same income and to ensure correct tax payments.
- Main Benefit
- Avoidance of double taxation
- Key Document
- Form 67
- Filing Requirement
- Before ITR submission
- FTC Calculation
- Lower of taxes paid abroad or Indian tax liability
- Qualifying Taxes
- Income tax, surcharge, health and education cess
- Non-Qualifying Taxes
- Interest or penalties on foreign taxes