India–UAE Double Taxation: How Foreign Tax Credit Actually Works

Summary: Foreign Tax Credit under the India–UAE tax framework does not provide an automatic rupee-for-rupee or dirham-for-dirham recovery of tax paid in the other country. The India–UAE DTAA provides relief where the same income may be taxed in both jurisdictions, but the credit is generally restricted to qualifying foreign tax paid by the same taxpayer on the same income and cannot exceed the residence-country tax attributable to that income. For Indian residents, Rule 128 requires source-wise computation and links the credit to foreign income offered or assessed to tax in India. The claim involves documentary evidence, foreign-tax payment or deduction records, currency conversion and Form 67, together with consistent reporting in Schedule FSI and Schedule TR. Company-level UAE Corporate Tax cannot ordinarily be claimed by an Indian-resident shareholder against tax on a dividend merely because the shareholder owns the UAE company. A UAE branch of an Indian company presents a more direct case because the branch and company are ordinarily the same taxpayer. Conversely, UAE companies suffering Indian withholding may claim UAE FTC only within the UAE Corporate Tax attributable to the relevant foreign income, and unused credit is generally not carried forward. Treaty analysis remains essential because excessive or incorrect source-country withholding may require a refund claim rather than reliance on FTC.

Introduction

Paying tax in the UAE does not automatically reduce an Indian tax bill by the same amount.

That point is often missed by business owners operating between India and the United Arab Emirates. A person may see tax deducted in India, pay UAE Corporate Tax or report the same income in both countries and assume that the entire foreign tax will be refunded or adjusted.

Foreign Tax Credit, commonly referred to as FTC, works differently. It is a limited credit against tax payable on the same income. Its availability depends on residence, the person who paid the tax, the nature of the income, treaty entitlement, documentary evidence and timely filing.

The India–UAE Double Taxation Avoidance Agreement provides the treaty framework, while the domestic laws of India and the UAE determine how the credit is calculated and claimed.

Why Can the Same Income Be Taxed Twice?

International businesses commonly separate the country where income arises from the country where the taxpayer is resident.

The source country may tax income because it arose within its territory. The residence country may tax the same income because its resident is taxable on worldwide income.

For example, an Indian-resident company may carry on business through a branch in Dubai. The UAE may tax profits attributable to that branch under its Corporate Tax law. India may also include the foreign branch profits in the Indian company’s taxable income because an Indian-resident company is generally taxable in India on its worldwide income.

Without a relief mechanism, the same branch profit could bear tax in both countries.

Double taxation may also arise when:

• An Indian resident earns income from a UAE business;
• A UAE company receives interest from India;
• An Indian customer deducts tax from a payment to a UAE service provider;
• A UAE company receives royalty income from India;
• An Indian company operates through a UAE permanent establishment;
• A UAE company operates through an Indian permanent establishment; or
• An individual changes residence during a year while continuing to receive income from the other country.

The DTAA does not always give exclusive taxing rights to one country. In several cases, both countries may tax the income, with the residence country providing relief through a credit.

What Article 25 of the India–UAE DTAA Provides

Article 25 of the India–UAE DTAA deals with elimination of double taxation.

Where an Indian resident derives income that may be taxed in the UAE under the treaty, India must generally allow a deduction from Indian tax equal to the income tax paid in the UAE. The deduction cannot exceed the portion of Indian tax attributable to the income that may be taxed in the UAE.

The UAE provides corresponding relief, subject to UAE law, where a UAE resident derives income that may be taxed in India. The UAE deduction is similarly restricted to the tax attributable to that income.

Although the treaty uses the word “deduction,” the mechanism operates as a credit against tax, not as an ordinary expense deducted from income.

The basic principle is:

Foreign Tax Credit = Lower of the eligible foreign tax paid or domestic tax payable on the same income.

The taxpayer cannot ordinarily use the credit to eliminate tax on unrelated income.

FTC Is Not a Refund of Foreign Tax

Suppose an Indian-resident company earns the equivalent of INR 10 lakh from its UAE branch.

Assume:

• UAE Corporate Tax attributable to that income is INR 90,000; and
• Indian tax attributable to the same income is INR 2,50,000.

The Indian foreign tax credit would ordinarily be limited to INR 90,000. The company would still pay the remaining Indian tax attributable to that income.

Now reverse the amounts:

• UAE tax paid is INR 2,50,000; and
• Indian tax attributable to the income is INR 90,000.

The Indian FTC would ordinarily be restricted to INR 90,000. The excess foreign tax would not become an Indian tax refund merely because the UAE liability was higher.

The credit prevents double taxation only to the extent of the tax imposed by the residence country on the same income.

Who Can Claim Foreign Tax Credit in India?

Under the Indian framework, FTC is available to a resident taxpayer for qualifying foreign tax paid outside India.

The claimant may be:

• An individual;
• A company;
• A partnership;
• A limited liability partnership; or
• Another resident taxpayer.

The claimant must first qualify as resident in India under the law applicable to the relevant period.

A non-resident generally cannot claim Indian FTC merely because the person holds an Indian PAN, files an Indian return or has income taxable in India. The credit mechanism is designed primarily to give residence-country relief.

Residence should be established before calculating the credit. For individuals, this requires application of the Indian day-count and additional residence conditions. For companies, the incorporation and place-of-effective-management rules may be relevant.

The Tax Must Relate to the Same Taxpayer

One of the most important FTC conditions is that the foreign tax should have been paid by, or properly attributable to, the person claiming the credit.

A shareholder cannot normally claim credit for tax paid by the company merely because the shareholder owns the company.

Consider an Indian-resident individual who owns a Dubai company:

• The Dubai company earns AED 1 million;
• The company pays UAE Corporate Tax; and
• The company later distributes a dividend to the owner.

The UAE Corporate Tax was paid by the company on its profits. The Indian tax on the dividend is imposed on the shareholder.

These are different taxpayers and different taxable events. The shareholder should not automatically claim the company’s UAE Corporate Tax as personal FTC against Indian dividend tax.

The position is different where an Indian company itself operates a UAE branch. A branch is not ordinarily a separate legal person from the company. UAE tax paid on the branch profit may therefore be eligible for consideration as credit against Indian tax payable by the same company on the same profit.

The Tax Must Relate to the Same Income

FTC requires a connection between:

• The income taxed in the foreign country;
• The income offered to tax in India; and
• The foreign tax for which credit is claimed.

A taxpayer cannot combine all foreign income and all foreign taxes into one pool without examining each source.

Indian Rule 128 requires the credit to be computed separately for each source of income arising from a particular foreign country or specified territory. The allowable credit is the lower of Indian tax payable on that income and foreign tax paid on the same income.

For India–UAE transactions, separate calculations may therefore be required for:

• Business profits;
• Interest;
• Royalties;
• Dividends;
• Capital gains;
• Salary;
• Professional income; and
• Income attributable to a permanent establishment.

Excess credit relating to one source should not be used casually against Indian tax on another source.

Which UAE Taxes Can Qualify in India?

Where India has a tax treaty with the foreign jurisdiction, Indian Rule 128 generally recognizes the tax covered by that agreement.

For an India–UAE claim, the taxpayer should examine:

• Whether the levy is an income tax covered by the treaty;
• Whether it was imposed on the taxpayer claiming credit;
• Whether it relates to income offered in India;
• Whether it has actually been paid or deducted;
• Whether it exceeds the tax permitted under the treaty; and
• Whether any refund is available in the UAE.

UAE Corporate Tax may qualify where it is imposed on the same taxpayer and the same income included in India.

The following payments should not automatically be treated as creditable income tax:

• UAE VAT;
• Customs duty;
• Excise tax;
• Municipality fees;
• Business-license fees;
• Immigration charges;
• Administrative penalties;
• Interest for late payment;
• Tax-agent fees; and
• Commercial or regulatory charges.

These amounts may have their own accounting or deduction treatment, but they are not automatically foreign income tax for FTC purposes.

Tax Paid Beyond the Treaty Rate

A taxpayer cannot necessarily claim credit for foreign tax that exceeds the amount properly chargeable under the DTAA.

Indian Rule 128 provides that where foreign tax paid exceeds the tax payable in accordance with the applicable treaty, the excess is ignored while computing the credit.

Assume an Indian payer deducts tax from a payment to a qualifying UAE resident at a rate higher than the India–UAE treaty permits.

The UAE recipient should first consider whether:

• The treaty rate was available;
• A valid Tax Residency Certificate was held;
• Form 10F and other documents were provided;
• A lower or nil withholding application was possible;
• A refund should be claimed in India; or
• The payment was incorrectly classified.

The recipient should not assume that the UAE will grant credit for an avoidable excess deduction merely because India collected it.

Salary Earned in the UAE

Salary is one of the most misunderstood India–UAE FTC situations.

The UAE does not currently impose a general personal income tax on ordinary employment salary. Consequently, an Indian resident who earns salary from a UAE employer may have no UAE income tax available as FTC.

If that individual is resident and ordinarily resident in India, the salary may still be included in worldwide taxable income in India, subject to the relevant law and treaty analysis.

The fact that the salary was:

• Earned from a Dubai employer;
• Paid into a UAE bank account;
• Not remitted to India; or
• Free from UAE personal income tax

does not, by itself, create an Indian exemption.

FTC is a credit for qualifying foreign tax actually paid. It is not a credit for tax that could theoretically have been imposed.

The first question should therefore be whether the salary is taxable in India and under which treaty provision—not how much credit can be claimed.

Dividends From a UAE Company

An Indian-resident shareholder receiving a dividend from a UAE company may be taxable in India on that dividend.

The UAE generally does not impose withholding tax on ordinary outbound dividends under its current Corporate Tax system. Accordingly, there may be no UAE withholding tax available as FTC.

The shareholder cannot ordinarily replace that missing credit with the UAE Corporate Tax paid by the company on its underlying business profit.

The documents should clearly distinguish:

• Company-level UAE Corporate Tax;
• Shareholder-level dividend income;
• Any withholding tax;
• Return of share capital;
• Shareholder-loan repayment; and
• Other distributions.

A bank transfer from the company to the owner is not automatically a dividend. The legal and accounting character of the payment must be established.

UAE Branch of an Indian Company

A UAE branch of an Indian company presents a more direct FTC case.

Suppose:

• An Indian company operates a consulting branch in Dubai;
• The branch earns net taxable profit;
• UAE Corporate Tax is imposed on that branch profit; and
• The same profit is included in the Indian company’s worldwide income.

Because the branch and the Indian company are ordinarily the same legal taxpayer, the UAE tax may be considered for Indian FTC, subject to the DTAA and Indian domestic rules.

The company should maintain:

• UAE branch financial statements;
• UAE Corporate Tax return;
• Tax-payment evidence;
• Reconciliation between UAE and Indian profit;
• Details of expenses allocated to the branch;
• Permanent-establishment analysis;
• Currency-conversion calculations; and
• Form 67 documentation.

The taxable profit calculated under UAE law may not match the amount taxable in India. Differences may arise from depreciation, expense deductibility, related-party charges, loss treatment, provisions and timing.

The Indian credit must be calculated with reference to the income and tax recognized under the applicable Indian rules, not by copying the UAE return without reconciliation.

Indian Tax Withheld From a UAE Company

The reverse situation is now increasingly relevant because UAE Corporate Tax can include foreign-source income in the taxable income of a UAE resident company.

Assume a UAE consulting company receives a payment from an Indian customer. The Indian customer deducts tax, while the UAE company also includes the related income in its UAE taxable income.

The UAE company may be able to claim FTC against UAE Corporate Tax where:

• The Indian tax relates to the company;
• The income is included in UAE taxable income;
• The tax is of a qualifying character;
• The DTAA has been considered;
• The company maintains evidence of the Indian tax; and
• The UAE credit limit is satisfied.

The UAE Federal Tax Authority explains that foreign tax credit is generally limited to the lower of the foreign tax paid and the UAE Corporate Tax due on the relevant foreign income.

This makes classification and withholding accuracy important. If India deducts tax at an unnecessarily high rate, the excess may not produce additional UAE credit.

UAE Credit Is Calculated on Relevant Foreign Income

The UAE calculation looks at Corporate Tax attributable to the relevant foreign-source income.

The UAE Federal Tax Authority’s guidance explains that:

• Foreign tax paid may have to be converted into UAE dirhams;
• Economically connected expenses must be considered;
• UAE Corporate Tax is calculated on net taxable income;
• Credit is unavailable for exempt income;
• Credit is unavailable where no UAE Corporate Tax is payable on the relevant income; and
• The calculation follows an income-by-income approach.

This can create a mismatch where India imposes withholding tax on gross revenue while the UAE taxes net profit after expenses.

For example, India may deduct tax from the gross service payment, but the UAE company may incur substantial employee, travel and operating costs. The UAE tax attributable to the net income may be lower than the Indian withholding. The excess Indian tax may not be fully creditable in the UAE.

A refund claim in India may therefore be commercially important.

Unused UAE Foreign Tax Credit

Under the current UAE Corporate Tax framework, unused FTC cannot generally be carried forward to a later tax period or carried back to an earlier period. The unused amount is forfeited and cannot be deducted from taxable profit.

This rule makes excessive Indian withholding particularly costly for UAE companies.

Suppose:

• India deducts AED 80,000 equivalent from a UAE company’s income; but
• UAE Corporate Tax attributable to that income is only AED 30,000.

The UAE credit may be limited to AED 30,000. The remaining AED 50,000 cannot ordinarily be carried forward as UAE FTC.

The UAE company should examine whether the excess can be recovered from India by filing an Indian income-tax return and claiming a refund.

No UAE Credit Where the Income Is Taxed at 0%

A UAE company may have foreign income but no UAE Corporate Tax payable on that income.

This can happen where:

• The income is exempt under the Participation Exemption;
• Small Business Relief applies;
• The taxpayer has an overall tax loss;
• The income qualifies for a 0% Corporate Tax rate; or
• A Qualifying Free Zone Person earns Qualifying Income taxed at 0%.

The UAE Federal Tax Authority states that FTC is unavailable where there is no UAE Corporate Tax payable on the relevant foreign income. This includes qualifying income of a Qualifying Free Zone Person taxed at 0%.

The taxpayer should therefore not assume that Indian withholding is harmless merely because the UAE recognizes foreign tax credits.

When Is FTC Allowed in India?

Indian FTC is generally allowed in the year in which the income corresponding to the foreign tax is offered or assessed to tax in India.

Where the income is offered to tax in more than one year, the credit is allocated proportionately across those years.

This principle is important where:

• Income is recognized over several years;
• Contract revenue is taxed on a percentage-completion basis;
• Foreign tax is paid after the Indian income was recognized;
• A foreign assessment is finalized later;
• Withholding and accrual occur in different periods; or
• The taxpayer follows different accounting treatments in India and the UAE.

The year of payment alone does not always determine the year of credit. The taxpayer must connect the tax with the period in which the related income is taxed in India.

Disputed Foreign Tax

Indian FTC is generally not available for foreign tax that the taxpayer disputes.

If the dispute is later settled, credit may become available for the year in which the corresponding income was offered or assessed in India, provided the prescribed evidence and undertaking are furnished within the required period.

Rule 128 requires the taxpayer, within six months from the end of the month in which the dispute is finally settled, to provide:

• Evidence of settlement;
• Evidence that the foreign-tax liability was discharged; and
• An undertaking that no direct or indirect refund has been or will be claimed.

A protective or contested foreign payment should therefore be tracked separately from final tax.

Interest and Penalties Are Not Creditable Tax

Indian Rule 128 allows qualifying credit against Indian tax, surcharge and cess. It does not provide credit for amounts payable as interest, fee or penalty.

Similarly, the UAE guidance excludes foreign interest, fines and penalties that arise because of tax-payment defaults.

A foreign-tax receipt may contain several components:

• Principal income tax;
• Late-payment interest;
• Administrative penalty;
• Filing fee; and
• Enforcement charge.

Only the qualifying tax component should be considered for FTC.

Foreign-Currency Conversion in India

Foreign tax paid in UAE dirhams must be converted into Indian rupees for the Indian FTC calculation.

Under Rule 128, foreign tax is converted at the telegraphic transfer buying rate on the last day of the month immediately preceding the month in which the foreign tax was paid or deducted.

The taxpayer should preserve:

• Foreign-currency amount;
• Date of payment or deduction;
• Applicable conversion rate;
• Source of the rate;
• INR equivalent; and
• Reconciliation with the tax certificate.

Using the Indian return’s year-end exchange rate for every foreign-tax payment may produce an incorrect credit.

Form 67 Is Central to an Indian FTC Claim

An Indian resident claiming FTC must furnish Form 67 electronically.

The form records:

• Taxpayer and assessment-year information;
• Country or territory;
• Foreign-source income;
• Foreign tax paid or deducted;
• Amount of credit claimed;
• Relevant treaty article;
• Disputed tax details;
• Foreign-tax refunds; and
• Supporting documentation.

The Income Tax Department confirms that Form 67 is filed online through the e-filing portal and requires supporting evidence of foreign tax payment or deduction.

Form 67 does not replace the income-tax return. The same foreign income and relief must be consistently reflected in the appropriate ITR schedules.

Current Filing Timeline for Form 67

For periods governed by Rule 128 of the Income-tax Rules, 1962, Form 67 and the prescribed evidence must generally be furnished on or before the end of the relevant assessment year where the return is filed within the time permitted under Section 139(1) or Section 139(4).

Where an updated return is filed, Form 67 relating to income included in that updated return must generally be furnished on or before the date of filing the updated return.

The Income-tax Act, 2025 and Income-tax Rules, 2026 apply from 1 April 2026. Taxpayers should use the statutory provisions, forms and terminology governing the relevant tax year rather than relying on an older checklist.

As a practical matter, Form 67 should be prepared with the return instead of being postponed until the last permissible date.

Evidence Required for an Indian Claim

Rule 128 recognizes a certificate or statement specifying the nature of income and foreign tax deducted or paid from:

• The foreign tax authority;
• The person responsible for deducting the tax; or
• The taxpayer, subject to supporting payment or deduction evidence.

The taxpayer’s own statement must be supported by documents such as:

• Online tax-payment acknowledgement;
• Bank counterfoil;
• Tax challan; or
• Proof of withholding.

For India–UAE cases, the working file may include:

• UAE Corporate Tax return;
• Corporate Tax assessment or payment receipt;
• UAE tax registration details;
• Indian withholding certificate;
• Form 16A, where applicable;
• Form 26AS or Annual Information Statement;
• Relevant contracts and invoices;
• Financial statements;
• Bank statements;
• Permanent-establishment computation;
• Schedule FSI;
• Schedule TR ;
• Form 67;
• Tax Residency Certificate;
• Form 10F; and
• India–UAE DTAA analysis.

Schedule FSI and Schedule TR

Foreign income should first be reported under the appropriate income head in the Indian return.

It may then need to be reported inSchedule FSI, which captures foreign-source income and the related foreign tax.

Schedule TR provides the country-wise summary of tax relief claimed.

The figures in the following places should agree:

• Relevant income schedule;
• Schedule FSI;
• Schedule TR;
• Form 67;
• Financial statements;
• Foreign tax certificate; and
• FTC computation.

A common error is to claim credit in Schedule TR without offering the corresponding gross foreign income under the correct income head.

Gross Income Versus Net Receipt

Foreign income should not automatically be reported at the amount received after tax deduction.

Assume a UAE income payment is AED 100,000 and tax of AED 10,000 is withheld. The taxpayer receives AED 90,000.

The gross income is ordinarily AED 100,000, while AED 10,000 represents foreign tax deducted. Reporting only AED 90,000 as income and separately claiming credit for AED 10,000 can understate taxable income.

The computation should distinguish:

• Gross income;
• Allowable expenses;
• Taxable income;
• Foreign tax paid;
• Domestic tax attributable to the income; and
• Allowable credit.

A Practical Indian FTC Example

Suppose an Indian-resident company has a Dubai branch.

For the relevant period:

• UAE branch profit under the Indian computation: INR 50 lakh;
• UAE Corporate Tax paid on the relevant income: INR 4 lakh;
• Indian tax attributable to that income: INR 12 lakh.

The maximum Indian FTC would ordinarily be INR 4 lakh, being the lower amount.

The Indian company would remain liable for the balance Indian tax attributable to the branch income.

If UAE tax were INR 15 lakh while Indian tax attributable to the income remained INR 12 lakh, the Indian credit would generally be capped at INR 12 lakh. The excess INR 3 lakh would not create an Indian refund.

This example is simplified. An actual calculation must consider:

• Country-wise and source-wise computation;
• Treaty limits;
• Indian expense and loss adjustments;
• Surcharge and cess;
• Currency conversion;
• Timing differences;
• Disputed taxes; and
• Foreign-tax refunds.

A Practical UAE FTC Example

Assume a UAE company earns net royalty income from India equivalent to AED 500,000.

India deducts tax equivalent to AED 50,000. UAE Corporate Tax attributable to that income is AED 35,000.

The UAE FTC would generally be limited to AED 35,000. The remaining AED 15,000 would not ordinarily be carried forward in the UAE.

The company should examine whether the Indian deduction:

• Applied the correct domestic provision;
• Respected the DTAA ceiling;
• Reflected beneficial ownership;
• Used the correct characterization;
• Considered a valid TRC and Form 10F; and
• Can be partly recovered through an Indian refund claim.

Foreign-Tax Refunds Must Be Tracked

A taxpayer may claim FTC and later receive a refund of the foreign tax.

If that occurs, the original credit may need to be reduced or corrected.

The Indian return’s tax-relief schedules require information about foreign tax refunded after relief was previously allowed. UAE law also contains correction requirements where a foreign-tax refund reduces an FTC already claimed.

Businesses should maintain a foreign-tax register recording:

• Income source;
• Foreign tax deducted;
• Tax paid;
• Credit claimed;
• Refund application;
• Refund received;
• Dispute status; and
• Return or disclosure requiring correction.

A refund received several years later should not be treated as unrelated cash income without examining the earlier credit.

FTC Does Not Replace Treaty Analysis

FTC should not be the first solution considered.

Before accepting foreign withholding as a cost, the taxpayer should determine whether the source country was entitled to tax the income.

For an India–UAE payment, the analysis may include:

• Residence of the recipient;
• Applicable treaty article;
• Beneficial ownership;
• Permanent-establishment exposure;
• Nature of services;
• Place of performance;
• Royalty classification;
• Applicable treaty rate;
• TRC;
• Form 10F;
• Withholding procedure; and
• Anti-abuse rules.

If India had no treaty right to tax the income, or deducted more than the treaty permits, the UAE recipient may need to claim a refund in India instead of relying entirely on UAE FTC.

Foreign Tax Credit mitigates valid double taxation. It should not be used to preserve an incorrect withholding position.

Common FTC Mistakes

Taxpayers commonly lose or overstate credit by:

• Assuming every foreign payment qualifies as income tax;
• Claiming UAE VAT or license fees as FTC;
• Claiming company-level tax in the shareholder’s return;
• Claiming credit without offering the related income in India;
• Reporting only the net amount received;
• Combining unrelated income sources;
• Ignoring the India–UAE treaty ceiling;
• Using the wrong currency-conversion rate;
• Claiming disputed foreign tax prematurely;
• Including interest and penalties in the credit;
• Filing Form 67 without supporting evidence;
• Failing to reconcile Schedule FSI, Schedule TR and Form 67;
• Claiming credit for tax that was later refunded;
• Assuming unused credit can always be carried forward;
• Ignoring excessive Indian withholding suffered by a UAE company; or
• Treating a UAE residence visa as proof of treaty residence.

A Better Compliance Process

A reliable FTC process should begin when the transaction is structured, not after the return is due.

Before payment, the parties should:

1. Identify the recipient’s tax residence.

2. Classify the income under domestic law and the DTAA.

3. Check whether the source country may tax it.

4. Confirm the treaty rate and documentation.

5. Determine whether withholding is required.

6. Estimate residence-country tax on the same income.

7. Identify whether the foreign tax will be fully creditable.

8. Maintain evidence of gross income and tax deduction.

9. Reconcile the accounting and taxable income in both countries.

10. Complete the prescribed return schedules and FTC form.

11. Monitor disputes and refunds.

12.Correct earlier credit if the foreign tax changes.

This process is particularly important for recurring interest, royalty, consultancy and branch-profit arrangements.

Conclusion

The India–UAE DTAA does not guarantee a rupee-for-rupee or dirham-for-dirham recovery of tax paid in the other country.

Foreign Tax Credit is limited to qualifying tax paid by the same taxpayer on the same income. The credit ordinarily cannot exceed the residence-country tax attributable to that income. Company-level tax cannot casually be transferred to a shareholder, and tax collected beyond the treaty entitlement may need to be recovered from the source country.

For Indian residents, a valid claim requires correct income reporting, source-wise computation, documentary evidence, Schedule FSI, Schedule TR and Form 67. For UAE taxpayers, the credit is subject to the UAE Corporate Tax attributable to the relevant foreign income, and unused credit is generally forfeited.

The practical objective is not simply to claim the largest credit. It is to ensure that the correct country taxes the correct income at the correct rate—and that any genuine double taxation is relieved through a supportable, timely claim.

References

1. Income Tax Department, Government of India, India–UAE DTAA Synthesised Text:
https://www.incometaxindia.gov.in/w/uae-synthesised-text-1

2. Income Tax Department, Government of India, UAE Comprehensive Agreement:
https://www.incometaxindia.gov.in/w/uae-comprehensive-agreements-1

3. Income Tax Department, Government of India, Rule 128—Foreign Tax Credit:
https://www.incometaxindia.gov.in/w/rule-128-1

4. Income Tax Department e-Filing Portal, Form 67 User Manual:
https://www.incometax.gov.in/iec/foportal/help/statutory-forms/popular-form/form67-um

5. Income Tax Department, Government of India, Form 67:
https://www.incometaxindia.gov.in/w/form-67

6. Income Tax Department, Government of India, Double Taxation Relief:
https://www.incometaxindia.gov.in/w/double-taxation-relief

7.  Income-tax Act, 2025 as amended by the Finance Act, 2026:
https://www.incometaxindia.gov.in/documents/d/guest/income_tax_act_2025_as_amended_by_fa_act_2026-pdf

8. Income Tax Department, Government of India,  Income-tax Rules, 2026 :
https://www.incometaxindia.gov.in/income-tax-rule-2026

9. UAE Federal Tax Authority, Corporate Tax Guide—Taxation of Foreign-Source Income:
https://tax.gov.ae/en/content/taxation.of.foreign.source.income.ctgfsi1.aspx

10. UAE Federal Tax Authority, Corporate Tax Guides and References:
https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.guides.references.aspx

11. UAE Ministry of Finance, Corporate Tax Legislation:
https://mof.gov.ae/corporate-tax/

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Disclaimer: This article is intended solely for general educational and informational purposes. It does not constitute legal, tax, treaty, investment or professional advice. Treaty provisions, domestic legislation, prescribed forms, filing procedures and official interpretations may change. Foreign Tax Credit depends on the taxpayer’s residence, income classification, documentation and specific facts. Readers should verify the provisions applicable to the relevant tax period and obtain professional advice before filing a return or claiming treaty relief.