Form 67 for US dividends
If your RSU or US shares pay dividends, the US usually withholds 25% before you see them. You can claim that tax against your Indian tax, but only if you file Form 67.
Why US tax is withheld
Dividends from US companies paid to non-US persons are subject to US withholding tax. With a W-8BEN on file, the India–US tax treaty rate of 25% normally applies. Your Form 1042-S shows the gross dividends and the tax withheld for the calendar year.
What to report in your ITR
- The gross dividend (before US tax) as income from other sources, taxed at your slab rate.
- Schedule FSI: the same foreign income, with the tax paid abroad.
- Schedule TR: the foreign tax credit you are claiming.
- Form 67: filed online on the e-filing portal, with the details of the foreign income and tax. File it before you file your return; without it the credit can be refused.
Which exchange rate
Convert each dividend and the tax withheld at the SBI TT buying rate on the last day of the month before the payment (Rule 115 and Rule 128). This is different from the date-of-value rate used in Schedule FA.
Calendar year vs financial year
Form 1042-S covers January to December. Your return covers April to March. For FY 2025-26, include dividends paid from April 2025 to March 2026: drop the January to March 2025 payments from the 1042-S and add January to March 2026 from your statements.
How much credit you get
The credit is limited to the lower of the US tax paid and the Indian tax on that same income. If your slab rate is lower than 25%, part of the US tax may not be creditable.
FA Ready lists every dividend in the financial year with the US tax withheld, the Rule 115 rate used and the rupee amounts, ready for Form 67 and Schedule FSI.