Under Rule 76 of the Income-tax Rules, 2026 (Notification No. 22/2026), statement of foreign tax credit (formerly Form 67 under Rule 128) is renumbered to Form 44 for claiming FTC under Sections 90 and 91.

Statutory Basis: Rule 76 (Formerly Rule 128) & Form 44

The Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026 via Notification No. 22/2026 (G.S.R. 198(E)) dated 20 March 2026, coming into force on 1 April 2026. Under Rule 76 (which replaces Rule 128 of the 1962 Rules), an Indian resident taxpayer claiming credit for foreign taxes paid outside India under Section 90, Section 90A, or Section 91 must electronically submit a statement of foreign income and tax paid in Form 44.

Form 44 serves as the official statutory declaration substantiating that foreign income has been subjected to tax abroad and that double taxation relief is legally admissible under a Double Taxation Avoidance Agreement (DTAA) or unilateral relief provisions.

Critical Deadline Rules for Form 44 Submission

Under Rule 76(9), Form 44 must be submitted electronically on or before the due date for furnishing the return of income under Section 139(1), or within the extended time allowed for filing an updated return under Section 139(8A).

Form 44 (Resident FTC) vs Form 10F (Non-Resident DTAA Declaration)

Tax practitioners frequently confuse Form 44 with Form 10F. The statutory distinctions are fundamental:

• Form 44 (Formerly Form 67): Filed by Indian Resident Taxpayers earning foreign-source income to claim credit in India for taxes paid in a foreign country under Section 90/91.
• Form 10F: Filed by Non-Resident Taxpayers earning income from India to claim DTAA relief from Indian TDS under Section 195. (See our comprehensive guides on Section 195 & DTAA Relief and Non-Resident TDS Compliance).

Clause-by-Clause Analysis of Form 44 Data Breakdown

Form 44 requires detailed disclosures across four main parts to ensure complete cross-verification with foreign tax filings:

1. Part A (General Information): Taxpayer name, PAN, residential status, assessment year, and details of foreign country / tax jurisdiction.
2. Part B (Country-wise & Head-wise Income Breakup): Specific head under which foreign income is taxable in India (Salary, House Property, Business/Profession, Capital Gains, Other Sources), nature of foreign income, foreign tax paid in local currency, and equivalent INR value.
3. Part C (Summary of Foreign Tax Credit Claimed): Total FTC claimed under DTAA Section 90/90A or Unilateral Relief Section 91.
4. Part D (Verification & Attachments): Declaration signed by taxpayer along with attached documentary evidence (tax payment receipts, employer withholding slips, or foreign tax assessment orders).

Foreign Currency Conversion Exchange Rate Rules (Rule 115)

A critical technical requirement when preparing Form 44 is determining the correct foreign exchange conversion rate. Under Rule 115 of the Income-tax Rules (read with Rule 76), the exchange rate for converting foreign tax paid into Indian Rupees is the Telegraphic Transfer Buying Rate (TTBR) of the State Bank of India (SBI) as on the last day of the month immediately preceding the month in which the tax was paid or deducted abroad.

Taxpayers must retain the official SBI TTBR rate certificate or published rate bulletin for the specified date, as tax assessing officers routinely verify foreign exchange conversion math during Section 143(3) scrutiny assessments. Using an incorrect exchange rate or a commercial spot rate (such as XE or Oanda) instead of the statutory SBI TTBR rate can lead to partial disallowance of FTC under Section 90.

Judicial Rulings on Procedural vs Mandatory Delay in Filing FTC Statements

A frequent area of litigation under legacy Rule 128 was whether filing Form 67 after the Section 139(1) deadline resulted in automatic forfeiture of Foreign Tax Credit. The Supreme Court of India and landmark High Court decisions (such as Duraiswamy Kumaraswamy v. CIT and CIT v. Sontek) established that filing the FTC statement is a directory procedural requirement rather than a mandatory condition precedent for entitlement to DTAA relief under Section 90.

Under Rule 76 of the 2026 Rules, CBDT incorporated this judicial principle into the statutory text by permitting Form 44 to be filed at any time up to the end of the assessment year or along with an updated return under Section 139(8A), providing substantial relief to NRIs and resident taxpayers with foreign income.

Computation of Foreign Tax Credit (FTC) under Sections 90 & 91

Under Section 90 (DTAA relief) and Section 91 (unilateral relief for countries without DTAA), FTC is calculated on a head-wise and country-wise basis:

Statutory Formula: FTC allowed is the lower of:

1. Tax paid on foreign income in the foreign country.
2. Indian tax payable on such foreign income under normal provisions.

Worked Numerical Example: Software Engineer with US Salary & RSU Income

Mr. Aniket Verma, a resident individual in Bangalore, earns ₹40,00,000 in Indian salary and $20,000 (equivalent to ₹16,50,000) from US RSU stock vested while working in the United States. US federal tax of $3,000 (₹2,47,500) was withheld by the US IRS.

• Total Income in India: ₹40,00,000 + ₹16,50,000 = ₹56,50,000.
• Indian Tax Payable on Foreign Income (Effective Rate ~25%): ₹4,12,500.
• US Tax Paid (Converted to INR): ₹2,47,500.
• FTC Admissible under Form 44: Lower of US tax (₹2,47,500) or Indian tax (₹4,12,500) = ₹2,47,500.
• Compliance Requirement: Submit Form 44 on e-Filing portal before 31 July 2026 along with US W-2 / tax payment certificate.

Interactive Form Converter & Foreign Income Guides

Check any renumbered TDS/TCS form number instantly using our free TDS & TCS Form Converter. Read our detailed statutory guides on Foreign Income DTAA & FEMA Compliance, TDS on Foreign Payments under Section 195, and Non-Resident TDS Guide.