Indian tax rates for foreign (passive) income - dividends, ltcg, and stcg

r2i4c · Post by **r2i4c** » Sun Mar 11, 2012 3:59 am

Hi,

We're ROR, and have a few securities investments (funds) in the US. After asking questions in the past on this forum, and reading other posts, I still have a few left. Here they're -

1) What % does GoI taxes Dividends, LTCG, and STCG issued by a foreign security to a ROR? I hear contradicting information regarding tax rates. Some say 20% for Dividends and LTCG where as some say that dividends are taxed at the marginal rate of tax.
2) Can I get indexation benefit for LTCG?
3) Can I get tax credit for tax deducted at source (as per the w8ben) by the US brokerage on my Indian tax return?
4) I understand that we need to use form ITR2 for declaring securities related income. So my assumption is that same form would be used for declaring foreign securities related income as well. Correct?

For the benefit of others, here is a thread where some other related questions of this nature are answered -
http://www.r2iclubforums.com/forums/showthread.php/23755-Declaring-US-assets-to-India-upon-end-of-RNOR-status?p=383343#post383343

Thanks,
R2i4c.

ps001 · Post by **ps001** » Mon Jul 16, 2012 1:18 pm

Hi All,

I also have some questions regarding the income received from foreign banks/investments. (I am a USC/OCI with a "resident" status in India).

Majority of my foreign income (95%) is in the form of dividends and 5% as bank interest.

1. My first question is how to report this income.

2. Second is what is the income tax rate applied for this income. Is this income clubbed together with my salary income in India and taxed at the rate of default tax slab rate?

3. Is there any mechanism to apply for tax credit if this income is already reported and taxed in the US tax return.

Any expert advise/opinions ....Thanks in advance

-PS

sacsharm · Post by **sacsharm** » Fri Jul 20, 2012 3:15 pm

I am in similar situation, some comments that came across while researching that might be of help, may be you already have the answers:
http://www.r2iclubforums.com/forums/showthread.php/24838-Indian-Taxes-on-US-stock-trades-and-dividends
http://articles.economictimes.indiatimes.com/2012-04-10/news/31313753_1_green-card-income-dtaa

3) Yes, "You can claim tax credit of taxes paid in US in the Indian Income Tax Return by filing the relevant details in in the column of "relief under sec. 90/91""
4) Yes.

Thanks.