While most international commercial vessels operate under flag states that do not withhold income tax at source, certain jurisdictions (or officers whose stay falls short of 182 days and become Indian tax residents) face double taxation challenges. Understanding Form 67 and Foreign Tax Credit (FTC) under Rule 128 is essential.
When is Foreign Tax Credit Needed?
If your CDC day count in a financial year falls below 182 days and you qualify as a Resident in India, your global maritime salary becomes subject to Indian income tax. However, if foreign taxes were withheld by your overseas employer or port jurisdiction, you can claim credit under Section 90 or 91 of the Income-tax Act via India’s Double Taxation Avoidance Agreements (DTAA).
Mandatory Filing of Form 67
To legally claim credit for foreign taxes paid:
- You must file Form 67 electronically on the income tax e-filing portal before or along with your ITR-2 return.
- Attach proof of foreign tax payment (tax deduction certificate, foreign salary slip showing withholding, or foreign tax return acknowledgement).
- Specify the relevant DTAA Article (typically Article 15 - Dependent Personal Services / Ships in International Traffic).
Our Senior Maritime Chartered Accountants handle cross-border treaty relief and Form 67 certifications to ensure you never pay double tax.