Hello Gurus,
Recently one of our Fixed Deposit with an Indian bank was matured that is in the name of my daughter (who is minor and US Citizen). We are decided to show the interest in our US Tax returns.
So, how do we let our bank know that they should not take any Income Tax from the matured amount?
Is there a form available that we can send it to the Indian bank?
Please advise.
Regards,
Vaanav
Which Tax form to send for a Bank in India?
Which Tax form to send for a Bank in India?
Is your daughter a resident of India or residing in USA?
Is this account resident Fixed deposit? NRO fixed deposit? (note that there is no TDS on NRE and FCNR Fds).
Is this account resident Fixed deposit? NRO fixed deposit? (note that there is no TDS on NRE and FCNR Fds).
Which Tax form to send for a Bank in India?
As always thanks Desi for your prompt reply.
FD was opened in Indian Rupees and at that time my wife and daughter was India and stayed there for 3 months. We have given our Indian Address to the bank. So I think it is Resident FD. There is no mention of NRO.
Please let me know if you need more information.
Regards,
Vaanav
FD was opened in Indian Rupees and at that time my wife and daughter was India and stayed there for 3 months. We have given our Indian Address to the bank. So I think it is Resident FD. There is no mention of NRO.
Please let me know if you need more information.
Regards,
Vaanav
-
Desibabu19
- Posts: 34
- Joined: Wed Dec 20, 2006 2:50 am
Which Tax form to send for a Bank in India?
OK, here is all the stuff you are supposed to do:
1. A US resident who is not a resident of India (by resident is meant per the GOI regulations based on number of days etc) should not open a resident bank account which you did,
Now you have two choices. Close the account and use the money for whatever or designate the account at the bank as NRO. Explain to bank that you want to change the account to NRO. Best time to do that is when the FD matures and instruct bank not to roll it over, but even if they do, you can break the FD and move it to NRO or spend the money or gift it to your parents or whatever.
2. The bank may or may not do TDS (Tax deduction at source). This is dependent upon the amount of interest paid.
3. I would think the bank would have already withheld the taxes, i.e. done TDS (but if they have not, there is a form 15G you can use).
4. For any tax witheld in India, your daughter can claim deduction if filing separate taxes. If her total passive (interest in this case) income is jus t interest, she does not have to file separate taxes but can be reported under your tax return (follow IRS instructions).
5. If tax is witheld in India, then you can file tax return in India and her taxes would be clubbed to your or your spouse's taxes (whereever the money came from). If you are only expecting a refund and it is small amount, you may choose not to file a tax return.
6. Any taxes refunded to you from Indian tax authorities will have to be claimed as income in US tax returns if the same were deducted as foreign taxes paid on foreign income in an earlier year.
7. If your daughter has a foreign account and it is over $10,000 combined in value, you need to declare it to treasury. If you are the custodian and daugher is a minor, you declare it in your name and attach a note that you are custodian.
1. A US resident who is not a resident of India (by resident is meant per the GOI regulations based on number of days etc) should not open a resident bank account which you did,
Now you have two choices. Close the account and use the money for whatever or designate the account at the bank as NRO. Explain to bank that you want to change the account to NRO. Best time to do that is when the FD matures and instruct bank not to roll it over, but even if they do, you can break the FD and move it to NRO or spend the money or gift it to your parents or whatever.
2. The bank may or may not do TDS (Tax deduction at source). This is dependent upon the amount of interest paid.
3. I would think the bank would have already withheld the taxes, i.e. done TDS (but if they have not, there is a form 15G you can use).
4. For any tax witheld in India, your daughter can claim deduction if filing separate taxes. If her total passive (interest in this case) income is jus t interest, she does not have to file separate taxes but can be reported under your tax return (follow IRS instructions).
5. If tax is witheld in India, then you can file tax return in India and her taxes would be clubbed to your or your spouse's taxes (whereever the money came from). If you are only expecting a refund and it is small amount, you may choose not to file a tax return.
6. Any taxes refunded to you from Indian tax authorities will have to be claimed as income in US tax returns if the same were deducted as foreign taxes paid on foreign income in an earlier year.
7. If your daughter has a foreign account and it is over $10,000 combined in value, you need to declare it to treasury. If you are the custodian and daugher is a minor, you declare it in your name and attach a note that you are custodian.
Which Tax form to send for a Bank in India?
Thanks Desi.
We will try to fix it, as it just matured. I think we have chance to fix it.
History:- We did not know the tax implications at that time (it is not an excuse and as everyone I am trying to do in correct way, this is only an exception) and in addition the money came from my father in law (daughter's grandfather). It happened 7 years back.
My FIL gave Rs 35000/- and which got matured to Rs 70000/-
As you had mentioned it is not huge sum to be declared.
Keep you posted.
Thanks a lot for advice.
We will try to fix it, as it just matured. I think we have chance to fix it.
History:- We did not know the tax implications at that time (it is not an excuse and as everyone I am trying to do in correct way, this is only an exception) and in addition the money came from my father in law (daughter's grandfather). It happened 7 years back.
My FIL gave Rs 35000/- and which got matured to Rs 70000/-
As you had mentioned it is not huge sum to be declared.
Keep you posted.
Thanks a lot for advice.