Taxation in India on Dividends Already Taxed in US

genesis · Post by **genesis** » Sat Apr 17, 2010 3:39 pm

Scenario: Resident Indian (Gave up GC) but still have substantial assets in the US.

Dividends from mutual funds were taxed at beneficial 25% rate on 1040NR as per the tax treaty.

What is the tax treatment for those dividends in India?

Thanks and regards

sgundurao · Post by **sgundurao** » Wed Sep 21, 2011 9:52 am

tax on dividends in india is 20%

anuj106 · Post by **anuj106** » Thu Oct 20, 2011 10:08 pm

The treatment as per Treaty is same i.e. 25% tax however as per Income Tax Act the same shall be included in total income which shall be taxed as per slabs.

Cheers,
Anuj
femaquery at gmail dot com[EMAIL="[email protected]"]
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kreati · Post by **kreati** » Mon Nov 14, 2011 9:53 am

My Uncle an US Citizen, is passing his old age in India and is resident as per Indian tax laws. He receives Social Security pension in form US Government, which is credited to his US Bank account and then as and when required, he seeks remittance to his Indian bank account. He also receives, Interest from bank on his Fix deposit or credit balance. He owns some shares in US.
I would be thankful to know:
1.Whether Social security pension credited in US bank account is taxable in India,
2. Whether amount remitted to Indian Bank account taxable in India ? Would it make difference if, amount now remitted is out of his savings from income earned in past?
3. Whether interest credited to US bank account taxable in India, even if not remitted to India?
3. Any Double taxation benefit available?

greyfri · Post by **greyfri** » Mon Nov 21, 2011 7:13 pm

Social Security is taxable ONLY in the US not in India. A special provision of the Indo US tax treaty.

If someone is resident in India for tax purposes, then he will be taxed on worldwide income, irrespective of whether its remitted or not. He will get a tax credit for any taxes paid to the US.

anuj106 · Post by **anuj106** » Mon Nov 21, 2011 7:33 pm

My view points are provided below the questions in blue.

kreati;423117My Uncle an US Citizen, is passing his old age in India and is resident as per Indian tax laws. He receives Social Security pension in form US Government, which is credited to his US Bank account and then as and when required, he seeks remittance to his Indian bank account. He also receives, Interest from bank on his Fix deposit or credit balance. He owns some shares in US.
I would be thankful to know:
1.Whether Social security pension credited in US bank account is taxable in India,
No, as per India-US DTAA the same is taxable in USA only.

2. Whether amount remitted to Indian Bank account taxable in India ? Would it make difference if, amount now remitted is out of his savings from income earned in past?
Amount remitted from US Bank account to Indian bank account is not taxable as the same is not income.

3. Whether interest credited to US bank account taxable in India, even if not remitted to India?
Yes, as the Indian resident is taxed on worldwide income.

4. Any Double taxation benefit available?
As explained in case of pension the amount is not taxable in India. Also the interest shall be taxable at flat 15% instead of slab rates.

Anuj