Let’s say an individual is in the nil tax slab in India but has capital losses from the US market. Now the FTC of the 25% tax deducted is not possible for him neither does he want it. But he wants these capital losses to be carried forward to the next years Will these losses be carried forward if he doesn’t upload the form 67, as he is not claiming anything as FTC, but files every other form correctly? He is planning to enter the amount to be claimed as NIL in the Schedule TR.
Another instance let’s say there is stcg or ltcg in India but overall the individual is in NIL tax slab rate. Then while filing schedule TR there is a section tax on normal provisions in India (lowest of either this or the 25% tax deducted in the US will be allowed to claim FTC). Now in this section do we need to calculate the dividend amount * 12.5% or 20%? Or does this tax on normal provisions in India means overall tax slab of an individual?
This FTC an be used to offset gains from any asset or source, whether from India or abroad, right?
Can Capital Losses Be Carried Forward Without Filing Form 67?
If you are in the nil tax slab in India, have capital losses from the US market, and are not claiming Foreign Tax Credit (FTC), the main question is whether those losses can still be carried forward when Form 67 is not filed.
Role of Form 67
Form 67 is specifically required when you claim Foreign Tax Credit under Section 90/91 of the Income Tax Act.
If you are not claiming FTC (and entering NIL in Schedule TR), then technically Form 67 is not mandatory for just reporting or carrying forward capital losses.
Carry Forward of Capital Losses
To carry forward capital losses in India, you need to ensure:
Income Tax Return (ITR) filed on time – Filing before the due date under Section 139(1) is essential.
Loss declared correctly – Report capital losses in the correct schedules of the ITR (Schedule CG).
No need for Form 67 if FTC is not claimed – Since you’re not using the foreign tax paid as a credit, losses can still be carried forward based on correct filing of ITR.
What Should You Do?
File your ITR within the due date.
Report your capital losses in the relevant schedule.
In Schedule TR, you can safely enter NIL, since you are not availing FTC.
Carry forward of losses will be allowed, as long as return filing conditions are met.
Key Point
Form 67 only links to FTC, not to the mechanism of carrying forward capital losses. So, you don’t lose the ability to carry forward losses by skipping Form 67 when no FTC claim is made.