US tax credit denied for not filing Form 67
A recent ruling by ITAT Bangalore has clarified that a delay in filing Form No. 67 does not automatically disqualify a taxpayer from claiming the foreign tax credit (FTC) on taxes paid abroad. This decision impacts Indian citizens like Shekhar, who receive income from both India and the USA and must manage the tax implications accordingly.
The case involved Shekhar, who was denied FTC for taxes paid in the USA when his ITR was processed. Upon filing a revised ITR, the FTC was again rejected. He then appealed the decision, which was upheld by ITAT Bangalore in August 2026.
The key takeaway is that while Form 67 must be filed within the stipulated timeframe, procedural delays alone should not bar a taxpayer from claiming FTC if the supporting documents are available. The ITAT Bangalore recognized the double taxation issue and allowed the claim, sending it back to the AO for a merit-based evaluation. This ruling provides clarity for taxpayers facing similar situations, emphasizing the distinction between procedural compliance and substantive entitlement to tax benefits.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
