DTAA Foreign Tax Credit Calculator
DTAA Foreign Tax Credit Calculator
How much of your foreign tax actually offsets India tax?
India tax on this income (pre-credit)
0
at your India slab rate
Foreign Tax Credit you can claim
0
lower of foreign tax paid or India tax due
Net India tax payable
0
after the credit
The FTC ceiling rule
Foreign Tax Credit is capped at the LOWER of what you actually paid abroad and what India would have charged on the same income — you never get a net refund from India, only relief up to India's own tax rate.
Excess foreign tax is a wash
Paperwork
Claiming FTC requires filing Form 67 BEFORE your ITR due date — missing this form is a common reason claims get rejected even when the underlying entitlement is valid.
This models the DTAA foreign tax credit mechanism in simplified form: India taxes your global income, but grants credit for foreign tax paid on foreign-source income, capped at what India itself would have charged. Actual DTAA articles vary by country and income type (salary vs dividend vs capital gains often have different treaty rates) — the specific treaty with your country of residence should be checked, not assumed. Form 67 must be filed on the income tax portal before your return's due date to claim this credit. Not tax advice.
Frequently asked questions
Should I choose the old tax regime or the new one?
It depends on how many deductions and exemptions you actually claim (80C, HRA, home loan interest, and similar). If your eligible deductions are substantial, the old regime often works out cheaper; if you claim few or none, the new regime's lower slab rates usually win. Compare both using your real numbers rather than assuming -- this calculator does that comparison directly.
What counts as a tax-saving investment?
Under the old regime, Section 80C covers instruments like PPF, ELSS mutual funds, EPF, life insurance premiums, and 5-year tax-saving FDs, up to the annual 80C cap. The new regime doesn't offer most of these deductions, which is the core trade-off between the two regimes.
How is capital gains tax calculated on mutual funds/stocks?
It depends on the holding period and asset type. Equity held over 12 months is taxed as long-term capital gains (with an annual exemption threshold); held less than 12 months, it's short-term and taxed differently. Debt funds follow their own, separate rules. Always check the current thresholds, since these are periodically revised.
What is TDS and when does it apply?
TDS (Tax Deducted at Source) is income tax deducted upfront by whoever pays you -- an employer, a bank paying FD interest above a threshold, and similar -- and deposited with the tax department on your behalf. It's an advance payment toward your total tax liability, not an extra tax, and is adjusted when you file your return.
Estimates only, not financial advice. See our Disclaimer.
