New Delhi, July 2 -- If you are working for a client or company that is based overseas, your income may be taxed not only in the foreign country where it is earned but also in India, depending on your residential status and applicable tax laws.

However, this does not necessarily mean you have to pay tax twice on the same income. Eligible resident taxpayers can claim credit for taxes paid abroad by filing Form 67 with the income tax department, helping them avoid double taxation.

Let's understand how foreign tax credit works with an example. Let's say you are an Indian tax resident working remotely for a US-based company and earn $10,000 as salary or professional income. A portion of your income will be withheld as tax by the US governme...