Why your foreign accountant needs more than your word
A foreign tax credit works on a simple principle: your country of residence taxes your worldwide income, but where some of that income has already been taxed in the country it came from, it gives you credit for that earlier tax so the same income is not taxed in full twice. India is the source country here, so from your home country's perspective the Indian tax is the "foreign" tax being credited.
The sticking point is evidence. A foreign tax authority will not take a credit on trust — it wants to see that the tax was genuinely paid, how much, and against which income. Your own summary is the claim, not the proof. An Indian Form 26AS or an ITR acknowledgement is the proof, but it is dense, in a format an overseas preparer struggles to read, and spread across TDS, advance tax and self-assessment entries.
A chartered accountant's certificate bridges that gap. It reads the Indian record, isolates the tax that actually sat on the relevant income, and states it in one clean signed statement. Because it carries an 18-digit UDIN that anyone can check on ICAI's public portal, it turns an Indian tax record into something a foreign authority is prepared to rely on.
What the certificate actually certifies
The Indian tax on a piece of income rarely arrives in one payment. Some is deducted at source by the payer (TDS), some you may have paid yourself in advance-tax instalments through the year, and the balance is settled as self-assessment tax when the return is filed. A credit claim abroad needs the total of all three, on the specific income being credited — not just the TDS, which is the part most people can see.
| What the certificate states | Where it reconciles to |
|---|---|
| TDS deducted on the income | Form 26AS, Form 16 / 16A |
| Advance + self-assessment tax | Form 26AS challans, filed ITR |
| Income the tax sits on | The relevant schedule of the ITR |
The CA does not assert a number. They tie each component back to Form 26AS / AIS — which carries the TDS credited, the advance-tax challans and the self-assessment payment — and to the income declared in the filed return, so the certified figure is traceable to records the Indian tax department already holds. The certificate names the financial year, the income and the documents relied on, which is exactly the chain a foreign reviewer follows.
Where the Indian job ends and the foreign one begins
It helps to be precise about who does what, because the credit is genuinely a two-country exercise.
The Indian side — the part a chartered accountant here delivers — is the certificate of tax paid in India: accurate, reconciled, UDIN-backed evidence of how much Indian tax sat on the income. India's own treaty relief provisions (Section 90 where a tax treaty applies, Section 91 where one does not) sit behind why the income was taxable here and how double taxation is meant to be relieved, but the deliverable is the evidence, not a foreign filing.
The foreign side — the part your overseas preparer owns — is the credit claim itself: whether your country allows the credit, how it is calculated and capped, the timing, and the specific schedule or form it goes on. That is governed by your home country's law and the relevant tax treaty, and is applied on your foreign return. We certify what was paid in India; your preparer claims the credit. Keeping that boundary clean is what stops a credit from being queried or disallowed.
A worked example: an NRI crediting Indian FD tax in the UAE-to-US case
Meera, an NRI who moved from Dubai to Boston mid-year and is now a US tax resident, earns interest on fixed deposits in India. The Indian bank deducted TDS on that interest, and she topped it up with self-assessment tax when she filed her Indian return. On her US return the same interest is taxable again, and her US preparer tells her she can claim a foreign tax credit for the Indian tax — but needs documented proof of exactly how much was paid.
A chartered accountant pulls Meera's Form 26AS for the year, which shows the TDS the bank credited and the self-assessment challan she paid, and her filed return, where the interest is declared. The CA issues one certificate stating the FD interest for the year, the total Indian tax borne on it across TDS and self-assessment, and confirms each figure reconciles to Form 26AS and the return. It goes out on letterhead with an 18-digit UDIN.
Meera's US preparer verifies the UDIN on ICAI's portal, sees a clean total tied to the Indian record, and claims the credit on her US return. How much of the Indian tax the US ultimately allows — the credit can be limited by the US tax on that same income — is a matter the US preparer works out under US rules; the certificate's job is to state the Indian tax accurately and verifiably so that calculation rests on a solid figure.