Form 67, the statement Indian residents have long filed to claim credit for tax paid abroad, now covers only income earned up to 31 March 2026. Under the Income-tax Rules, 2026, foreign tax credit from tax year 2026-27 onwards is claimed in Form 44, and the number 67 has been given to an unrelated report. The change matters this season because filing for the year to 31 March 2026 is still under way. The CBDT has extended the return due date for audit cases to 21 November 2026, according to an All India Radio report of 29 September 2026.
For an Indian investor who receives distributions from U.S. property, this form is where tax withheld in the United States becomes a credit against tax in India. Most such investors hold U.S. property through a U.S. corporation, so their payments are dividends taxed in both countries, as the U.S. real estate tax guide for Indian investors explains. The credit is a treaty right, but it is not automatic. It depends on the right statement, for the right year, with the right proof, and the move to Form 44 means one investment can now fall under two sets of paperwork.
What Form 67 Does for Income From U.S. Property
India taxes its residents on their worldwide income, so a dividend from a U.S. corporation is taxable in India even after U.S. tax has been withheld. A foreign tax credit stops the same income being taxed twice in full. The credit is limited to the lower of the Indian tax on that income and the foreign tax actually paid on it. It can reduce Indian tax, but it never creates a refund of U.S. tax.
Form 67 was the statement prescribed for this under Rule 128 of the Income-tax Rules, 1962. It listed each item of foreign income, its country, the tax paid there and the credit claimed, and it was filed online. Without it, the department could refuse the credit even when the foreign tax had clearly been paid.
For a U.S. property investment held through a corporation, the numbers that go into the statement come from U.S. withholding. The India-US Double Taxation Avoidance Agreement reduces U.S. tax on dividends paid to Indian resident individuals to 25%, from the standard 30%, provided the investor has given the payer a valid Form W-8BEN. The tax actually withheld appears on Form 1042-S, the annual IRS statement of income paid to a foreign person and the tax deducted from it.
How Form 44 Replaces Form 67 From Tax Year 2026-27
The Income-tax Act, 2025 came into force on 1 April 2026, and the new rules renumbered most forms. Foreign tax credit is now governed by Rule 76 of the Income-tax Rules, 2026, and the statement is Form 44, titled "Statement of income from a country or region outside India and Foreign Tax Credit". It asks for the country, the foreign tax identification number, the nature of the income, the tax paid abroad, the Indian tax on the same income, and the treaty article and rate relied on.
The principle has not changed. The credit is still the lower of the Indian tax and the foreign tax. Foreign tax is still converted into rupees at the telegraphic transfer buying rate on the last day of the month before the month in which it was paid or deducted. Two procedural points read differently. Form 44 is due within twelve months from the end of the tax year in which the income was taxed, provided the return itself was filed on time. It must also be verified by an accountant where the foreign tax for the year reaches ₹1 lakh or more.
The number 67 lives on with a different job. Under the new rules, Form 67 is the report on adjusted total income and alternate minimum tax, a computation that has nothing to do with income earned abroad. Anyone who looks for Form 67 next year will find that report, so the year of the income now decides which form number is correct.
Which Form Applies to Which Year
One investment can now sit across both regimes. Dividends received between 1 April 2025 and 31 March 2026 are taxed under the Income-tax Act, 1961, and the credit for them is claimed in Form 67. A 2022 amendment to Rule 128 allows that form to be filed after the return, up to the end of the year in which the income is assessed, which for this income is 31 March 2027. Dividends received from 1 April 2026 fall in tax year 2026-27 under the new Act, and the credit for them is claimed in Form 44 within twelve months after 31 March 2027.
The U.S. calendar adds a second layer. According to the IRS, Form 1042-S must be filed by 15 March of the year after the calendar year in which the income was paid, so each form covers January to December. A Form 1042-S for calendar 2026 therefore covers January to March 2026, which belongs to the old year and Form 67, and April to December 2026, which belongs to tax year 2026-27 and Form 44. A CA has to split the withholding payment by payment, using the date on each distribution statement, before either Indian statement can be filled in.
What Indian Investors Should Keep for the Foreign Tax Credit
Rule 76 asks for a certificate or statement showing the nature of the income and the tax deducted or paid, with proof of payment or deduction. It can come from the foreign tax authority, from the person who deducted the tax or from the taxpayer. For an investor in U.S. property, that evidence usually comes from the following records.
- Form 1042-S for each calendar year in which a distribution was paid
- Each distribution statement, showing the payment date, the gross amount, the U.S. tax withheld and the net amount
- A copy of the Form W-8BEN given to the payer to claim the treaty rate
- The bank's credit advice for each payment received in India
- Form A2 and the bank's confirmation for the original remittance under the Liberalised Remittance Scheme
The same holding also appears elsewhere in the return. The foreign income and the relief claimed are reported in Schedule FSI and Schedule TR, and a resident and ordinarily resident investor discloses the shares in the U.S. corporation in Schedule FA, as the guide to what Schedule FA asks of investors in U.S. real estate sets out. The figures in all three places should match the credit statement.
Risks and Limits of Relying on the Credit
A foreign tax credit does not remove tax. It only prevents the same income being taxed twice in full, and where the Indian tax on a dividend is lower than the U.S. tax withheld, India does not refund the difference. A late statement can also cost the credit. In a February 2026 judgment involving Real Time Data Services, the Delhi High Court held that a delay in filing Form 67 was a procedural lapse that should not defeat the credit. It directed the officer to allow the credit after verification. That relief needed a writ petition, and an investor cannot plan on it.
The credit also depends on there being income in the first place. Distributions from U.S. property rely on tenants paying rent, on operating costs and on the property meeting its loan payments, and a sponsor may reduce, delay or stop them. Investors can lose capital if property values fall, leverage and refinancing can absorb cash, private real estate is illiquid, and currency movements change the rupee value of every payment. Tax rules change too, as this renumbering shows, and each investor's tax position stays with them and their CA.
A Credit That Now Depends on the Calendar
The arrival of Form 44 does not change what an Indian investor is entitled to. It changes the form number, the deadline wording and the verification threshold, and it creates a period in which one U.S. holding produces income under two Acts. For the next two filing seasons, an investor with U.S. dividends may need Form 67 for one year and Form 44 for the next, built from the same Form 1042-S. The tax guide for Indian investors in U.S. real estate explains how the corporate structure creates these dividends.
Before investing, it helps to ask the sponsor which entity pays distributions, when Form 1042-S is issued and whether each distribution statement shows the tax withheld. It also helps to ask a CA how payments will be split between Indian tax years and which form applies to each. The article on how U.S. dividend tax in India applies to property distributions follows a single payment from the property to an Indian bank account, and the full process of investing from India covers the steps that come before it.
The credit is worth having only if the paperwork reaches the right form for the right year, and that is something an investor can check before the first distribution arrives. Eligible investors can review how investing in U.S. real estate from India works on Raveum, including the property, sponsor, ownership structure, fees, risks and offering documents for each opportunity.
Frequently asked questions
Is Form 67 still used to claim foreign tax credit?
Only for income earned up to 31 March 2026. Credit for that income is still claimed in Form 67 under the old rules. From tax year 2026-27, the Income-tax Rules, 2026 move the claim to Form 44 under Rule 76, and Form 67 becomes a report on alternate minimum tax. Check the income's year before choosing the form.
Can Form 67 be filed after the income tax return?
Yes, for income up to 31 March 2026. Since a 2022 amendment to Rule 128, Form 67 can be filed after the return, up to the end of the year in which the income is assessed, which is 31 March 2027 for that income. For later years, Form 44 is due within twelve months after the tax year ends.
What happens if I miss the deadline for Form 67?
The department can deny the foreign tax credit, which leaves the income taxed in both countries. Courts, including the Delhi High Court in February 2026, have treated a late Form 67 as a procedural lapse and allowed the credit after verification, but that relief needed litigation. Filing on time is the only dependable route.
Can I claim foreign tax credit on U.S. dividends?
Yes. A resident individual pays Indian tax on the gross U.S. dividend at slab rates and can claim credit for U.S. tax withheld, usually 25% under the India-US tax treaty when a valid Form W-8BEN is on file. The credit is limited to the lower of the Indian tax on that dividend and the U.S. tax actually paid.
What documents do I need to claim foreign tax credit in India?
You need a certificate or statement showing the nature of the income and the tax deducted, from the foreign tax authority, the payer or yourself, plus proof of the deduction or payment. For U.S. property income, that usually means Form 1042-S and each distribution statement. Form 44 also needs an accountant's verification when the year's foreign tax reaches ₹1 lakh.
What if the U.S. tax withheld is more than my Indian tax?
India allows credit only up to the Indian tax on that same income, so any U.S. tax above that amount is not refunded or carried forward in India. This can happen when your slab rate is lower than the treaty withholding rate. Whether any excess can be recovered in the United States is a question for a U.S. tax adviser.
This article is for general education only and is not investment, tax or legal advice. Rules change and depend on individual circumstances. Investing in private real estate involves risk, including loss of capital, illiquidity, falling property values, distributions not being paid and currency movements. Participation is limited to non-U.S. persons under SEC Regulation S and verified U.S. accredited investors under Regulation D Rule 506(c), and offerings on Raveum are not open to the general public.
