The years do not line up
India taxes on a year running 1 April to 31 March. Your country almost certainly uses a different one: the UK runs 6 April to 5 April, Australia 1 July to 30 June, and the US, Canada and most of Europe the calendar year, 1 January to 31 December. So a single Indian financial year overlaps two of your home years, and the income India taxes in one year is taxed by your country in a year with different edges.
That alone would be manageable, but two more things stretch the gap: tax in India is withheld before your real liability is known, and any over-withholding is refunded well after the year closes.
Credit is for tax finally paid, not tax withheld
On Indian income, especially for a non-resident, tax is deducted at source under Section 195, often on the gross amount, before any deductions or your actual rate. Your real Indian tax is only settled when you file your Indian return, due 31 July after the year ends for most people, and the excess over your real liability is refunded after that.
Your home country does not give credit for the amount withheld. It gives credit for the Indian tax you finally bear, in the year that income is taxed at home. So you claim the credit on the Indian tax as it truly settles, which means waiting for, or estimating, the Indian outcome. In the US you can elect on Form 1116 to claim the credit on an accrued basis, which lines it up with the year the income is taxed rather than the year you happened to pay.
When India refunds, you go back and adjust
The most-missed step is what happens when India later refunds part of the tax. Because your credit was for the tax you actually bore, a refund means you claimed too much, and you have to correct it. In the US this is a legal duty: a refund of foreign tax is a redetermination under Section 905(c), and you must tell the IRS and adjust the credit. The UK, Canada and Australia reach the same place through their own amendment rules, you go back and reduce the foreign tax credit you claimed.
So the clean way to handle Indian tax across the border is to claim the credit on the Indian tax finally settled, keep the Indian return and the tax-paid proof, and be ready to amend the foreign year if India refunds. This is exactly where an Indian CA and your home accountant need to hand figures to each other.
A worked example
Ravi lives in the UK and earns Indian rent. In the Indian year to March 2026, tax is withheld on the gross rent, more than his real Indian tax after the standard deduction and his expenses. He files his Indian return in July 2026, his real Indian tax is lower, and a refund is due.
For his UK return he claims credit not for the tax withheld but for the Indian tax he finally bears, in the UK year that the rent is taxed. When the Indian refund comes through, he goes back and reduces the UK credit to match. Claiming the withheld figure and forgetting the refund would have over-credited and invited a correction later.