Confused: Should a USC living in India open savings bank account with Form 15G?

[kakinada]

I looked up the discussions here and on internet. Still confused. I closed NRE and opened savings as USC in India for more than a year.
Should I use Form 15G to instruct the bank to not hold TDS.

I understand that since I will be paying taxes to the Indian govt (and getting a credit from US govt as income less than approx $88), TDS is fine. But bank fellows insist otherwise.

Please advise. Thanks

[RRK]

Do you have taxable income in India ?

What does the bank official say regarding 15G ?

[desihometown]

I think that tax rate will be lower (10%) if you file but I'm not sure you can completely escape paying any taxes.

(There are a few really special clauses where you can avoid paying taxes in India).

I suppose it doesnt matter where you pay taxes right ? If you have a large FD (say 1 crore) in India and you get 10 lakhs a year in interest income and you dont pay any taxes on it in India, then you need to pay taxes on that in US, from your annual US saalry/income. (say 30% tax bracket including state or 6K USD). If you dont want to do that, I figure its better to let the interest income from the India FD pay the taxes in India and you just get foreign interest credit when you file your annual US taxes.

I could be wrong on this. Perhaps a better tax-aware member or a prefessional can comment.

I was thinking of not filing TDS. Otherwise, I'll have to figure out a way to come up withe money for paying taxes in US on interest income earned in India. Of course, for smaller amounts it doesnt really matter, but for larger amounts it is something to think about I suppose.

--DHT

[kakinada]

Hello RRK
Yes I have taxable income in India. Bank says that other USC are doing it. desihometown - your comments are valid for USC in US I think.