March 31 form 67 deadline: Get your US tax back

Every time a US company pays you a dividend, the IRS withholds 25% of it as tax. That money sits with the US government unless you take one simple step. You must file Form 67 on India's income tax portal before March 31, 2026, for FY 2024-25 income.

Miss this date and that 25% becomes a permanent loss. You pay tax on the same income twice — once in America, once in India. The good news is that the process takes under 30 minutes. This guide walks you through everything you need to do right now.

What is Form 67, and why should you care

Form 67 is the official declarationthat Indian residents file to claim a foreign tax credit in India. It tells the income tax department how much tax a foreign country already deducted from your income. Without it, India's Central Processing Centre ignores the US tax you paid and calculates your full Indian tax liability from scratch.

The form is governed by Rule 128 of the Income Tax Rules, 1962. This rule sets the procedure for claiming credit under Section 90 of the Income Tax Act. Section 90 gives effect to the DTAA between India and the US—the treaty that prevents the same dividend from being taxed in both countries.

Think of Form 67 as the receipt you show India's tax department. It proves you already paid tax abroad and are eligible for credit against your Indian tax bill.

The March 31 deadline is explained.

Before 2022, you had to file Form 67 before the ITR due date of July 31. CBDT Notification No. 100/2022 changed this by extending the Form 67 filing deadline to the end of the assessment year.

For FY 2024-25 income, the assessment year is AY 2025-26. That makes March 31, 2026, your final deadline. You must have already filed your income tax return within the allowed time under Section 139(1) or 139(4).

Here is a quick timeline for current and upcoming years. For FY 2024-25, your ITR was due by July 31, 2025, and your Form 67 is due by March 31, 2026. For FY 2025-26, your ITR is due by July 31, 2026, and Form 67 can be filed until March 31, 2027.

This eight-month extension gives you breathing room. But waiting until the last week invites portal glitches and missed deadlines.

How the India-US DTAA protects your dividends

The Double Taxation Avoidance Agreement between India and the US prevents each country from taxing the same income twice. Article 10 of the DTAA between India and the US caps the US withholding tax on dividends paid to Indian individual investors at 25%.

Many websites wrongly state this rate as 15%. The 15% rate applies only to companies that own at least 10% of the voting stock. Individual retail investors always face the 25% rate under Article 10(2)(b).

If you filed the W-8BEN form with your US broker, the broker withholds 25% instead of the default 30%. Without W-8BEN, you lose an extra 5% that becomes nearly impossible to recover.

Article 25 of the treaty then requires India to grant a credit for the tax already paid in the US. This credit is operationalised through Rule 128 of the Income Tax provisions and Form 67. The system works, but only if you complete the paperwork.

Learn more about how to claim DTAA tax treaty benefits on US stocks to maximise your treaty relief.

How the foreign tax credit calculation works

The foreign tax credit in India equals the lower of two amounts: the actual US tax paid, or the Indian tax payable on that foreign income. Rule 128 requires you to calculate this separately for each income source from each country.

Consider a practical example. You receive $100 in gross dividends from a US stock. The US withholds $25 at source. At an exchange rate of ₹84 per dollar, your gross taxable income in India is ₹8,400. The US tax paid converts to ₹2,100.

If you fall in the 30% tax bracket, your Indian tax on ₹8,400 works out to roughly ₹2,621 (including 4% cess). Since ₹2,100 is less than ₹2,621, you claim the full ₹2,100 as credit. You pay only ₹521 extra to India. Your total tax rate stays at 31.2% — no double taxation.

But investors in lower brackets face a gap. At the 20% slab, Indian tax on ₹8,400 is only ₹1,747. You can claim just ₹1,747 as credit, and ₹353 of the US tax becomes an irrecoverable cost.

The key takeaway: higher-bracket investors recover the full US tax. Lower-bracket investors absorb a small loss because the 25% US rate exceeds their Indian tax rate.

Step-by-step process to file Form 67

Filing Form 67 on the income tax portal is straightforward. Gather your documents first, then follow these steps.

Start by logging into incometax.gov.in with your PAN. Navigate to e-File, then Income Tax Forms, then File Income Tax Forms. Select "Form 67" and click " File Now. Select AY 2025-26 for FY 2024-25 income and click Continue.

Fill Part A with these details: country name (United States), nature of income (dividend), gross income in Indian rupees, US tax paid in Indian rupees, DTAA article number (Article 10 for dividends), and the credit amount you claim.

Upload your Form 1042-S as a PDF attachment. This is the US equivalent of a TDS certificate. Your US broker issues it by mid-March each year. Attach your brokerage dividend statement as supporting proof.

Preview all entries, click Proceed to e-Verify, and authenticate using Aadhaar OTP or Electronic Verification Code. Save the transaction ID and acknowledgement number for your records.

One critical rule: always file Form 67 before submitting your ITR. Filing it afterwards can cause mismatches during CPC processing. Your Form 67 figures must exactly match Schedule FSI and Schedule TR in your tax return.

Documents you need before filing

Keep four documents ready before you start. First, your Form 1042-S from the US broker, which shows gross dividends and tax withheld. Second, your brokerage account statements showing dividend payment dates and amounts.

Third, the SBI Telegraphic Transfer Buying Rate for currency conversion. Rule 128 requires you to use the TTBR from the last day of the month before the dividend payment month. Do not use Google exchange rates or approximate figures.

Fourth, your W-8BEN filing confirmation. This proves you claimed the reduced 25% DTAA rate instead of the default 30%. Most platforms like Winvesta handle W-8BEN electronically during account setup.

Common mistakes that cost you money

The biggest mistake is not filing Form 67 at all. Many first-time investors skip it because their dividend amount seems small. Even ₹500 in US dividends requires Form 67 to claim the credit.

Another frequent error is reporting the net dividend rather than the gross. If you received $75 after 25% withholding on $100, declare the full $100 converted to rupees. Report the gross amount in Schedule OS and claim the withheld amount as a credit.

Using ITR-1 instead of ITR-2 is equally damaging. ITR-1 lacks Schedule FA, Schedule FSI, and Schedule TR. Any Indian resident holding even one US stock must file ITR-2 or ITR-3.

The US dividend tax for Indian investors follows the US calendar year (January to December), whereas India uses the April to March fiscal year. Dividends received from January to March 2025 belong to FY 2024-25. Dividends from April to December 2025 belong to FY 2025-26. Mixing these up creates mismatches that trigger automatic rejection.

Also, watch out for Schedule FA. It requires disclosure of all foreign assets held during the calendar year, not the financial year. Failure to disclose can attract a ₹10 lakh penalty under the Black Money Act.

Read our detailed guide on understanding the 25% withholding tax on US stock dividends for a complete breakdown. What courts say about late filing

Despite the March 31 deadline, India's tax tribunals have consistently ruled in favour of taxpayers who filed Form 67 late. The Madras High Court held in Duraiswamy Kumaraswamy v. PCIT (2023) that Form 67 filing is procedural rather than mandatory.

ITAT benches across Mumbai, Bangalore, Delhi, Pune, and Hyderabad have followed this principle. In every case, courts treated the FTC as a right granted by the DTAA, not a privilege that a procedural lapse could defeat.

However, the CPC still mechanically rejects late claims. Winning on appeal takes months of litigation and professional fees. Filing on time remains far cheaper and simpler than fighting it in court.

What changes from April 2026

The new Income Tax Act 2025, effective April 1, 2026, replaces Form 67 with Form 44. The Draft Income-Tax Rules 2026, released in February 2026, introduce two major changes.

First, claims where foreign tax paid exceeds ₹1 lakh will require mandatory verification by a Chartered Accountant. Currently, self-certification is enough. Second, the new form requires your Tax Identification Number from the country where tax was paid.

For FY 2024-25 and FY 2025-26, the current Form 67 still applies. But plan — future claims may cost more in professional fees once CA verification is required

becomes mandatory.

The March 31 deadline matters more than most investors realise. Thirty minutes of paperwork today saves you from losing 25% of every dividend cheque. File the income tax portal, file Form 67, and make sure your hard-earned returns actually reach your bank account.