r2i forum

p { margin-bottom: 0.21cm; } My situation is much simpler than a lot of those i have been following on this forum. But i have not been able to come to a conclusion as to what i should be doing, and the more i read the more confused i am becoming.

I am a USA citizen and came to india in october of 2003 on a tourist visa, and it took me until march 2006 to get my OCI status. I would have been a resident from the beginning since i never left the country except for a short visit to america in 2005, 2008 and 2010, but i would think that legally that would be impossible for someone on a tourist visa, so let's say i have been a legal resident since march 6, 2006.

I have no income generated or received within india other than some capital gains from sale of mutual funds, but they would be below the limit of what i would have to pay income tax on if none of my other income is taxable. we are talking small potatoes here compared to you guys...

In america i have two IRA accounts which are handled by the government because they were tax deferred; one is from my earnings when i worked in america and the other is from my father which i inherited through my mother after she passed away. I take distributions from these accounts. Since i am required to pay income tax on these distributions in USA regardless of where i live, i also have to include the capital gains. USA does not care where a person's income is produced or received. I retired prior to leaving america, and during the time i have been here i reached the age to be eligible for social security wages.

In the sale of some mutual funds here, TDS was deducted (5000 rs) and now i have to file a tax return in india to get that returned to me. Unless it is true that i have to pay india income tax on something or everything else, which is part of my dilemma.

I hope this is enough information so that someone can advise me of my liability.



Secondly, i was given an nre account through hdfc bank and i was transferring money from the bank in america where the ira withdrawals and social security payments are deposited and that is what i use to live on. It appears to me that i am not really eligible for an nre account, which i tried to explain to the bank some time ago but they wouldnt listen. I think there is no other way they can accommodate my wanting to transfer money through the internet from the bank in america to the bank in india. So this is the reason that they deducted TDS from my sale through Franklin Templeton, because my bank account is for non residents, and they will continue to do so until i can present them with a different bank account.

I am in the meantime trying to find out if i can use the bank in america to transfer money through the internet to a bank here, but if i am not able to take care of that without going to america (which i may not be doing again ever anyway) can you tell me how i can do it from here? If i have an ordinary resident account at a bank here would that be possible, and if so which bank would be the most reliable? Then i can get franklin templeton to change my status to 'resident' and stop taking out the TDS so i dont have to file tax here.

Unless of course i find out that i do have to file tax here. I am in a state of shock right now thinking what that would mean...

And also i want to make it clear that i would be more than happy to pay tax to india rather than america, but i really have no choice in the matter-there is no way to get out of paying IRS on the ira's and if i become an indian citizen i will lose the social security payments as well. I also have no wish to repatriate any money that i bring here-whatever i bring here will stay here even after i die.

Sorry, my first post was very long and convoluted. Maybe i should try again. Can anyone who participated in it tell me if the question was ever resolved and if so what is the backup for the answer? I read about 7 pages and was getting nowhere. http://www.r2iclubforums.com/forums/showthread.php/442-Indian-Tax-rules-for-401k-IRA-withdrawals-after-return

According to the GOI, are the withdrawals from IRA accounts in america by a person domiciled in india taxable?

the IRA account is actually wages that were never paid to the person who earned them. Capital gains would not apply because they only increase or decrease the amount of the wages due. When the beneficiary deducts them, they are getting income-but if they earned it in america the taxes would have to go there regardless of where the recipient is currently domiciled or where the bank account is that receives the distribution. The money is deposited to a bank in america and may or may not be electronically transferred to india.

Are social security payments from usa to their citizens living in india considered taxable by GOI?

This is money that was pulled out of my wages while i worked in america but against my will, more or less a forced retirement account. It is not taxable in america unless my total income from all sources exceeds certain limits set by them.

The answer I need would apply to a USA citizen who is a resident of India in possession of the overseas citizenship card, a person of Indian origin, who is retired, unemployed and age 64.