25 June 2022 20:34

How much of tax-paid money can I keep in the US, as an Indian citizen?

Is Indian income taxable in USA?

The US-Indian Treaty provides little benefit
Meaning, anything earned in India is subject to US taxation. However, the foreign income exclusion applies if you are domiciled in India, and you may be entitled to a foreign tax credit for any taxes paid in India.

Are Indian citizens taxed worldwide income?

If you are a resident Indian, your global income is taxable in India. This income may have been earned or received outside – but it shall be taxed in India. If this income is also taxable in another country, you can take benefit of DTAA (Double Tax Avoidance Agreement).

What is US tax treaty benefits from India?

An income tax treaty between the United States and India exempts the portion of your benefits that is based on earnings from U.S. Federal, State or local government employment from nonresident alien tax if you are both a resident and a national of India.

What taxes do you pay if you leave the US?

1. I’m a U.S. citizen living and working outside of the United States for many years. Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.

How much foreign income is tax free in India?

You have to treat this income as any other income which is earned by you locally. Minimum exemption of Rs 2,50,000 is allowed on your total income and the remaining income is taxable as per income tax slab rates.

How can you avoid double taxation?

You can avoid double taxation by keeping profits in the business rather than distributing it to shareholders as dividends. If shareholders don’t receive dividends, they’re not taxed on them, so the profits are only taxed at the corporate rate.

Do I need to declare foreign income in India?

Assuming you would qualify as ‘Resident and Ordinarily Resident’ in India upon return; as a ‘Resident and Ordinarily Resident’ of India, you would be taxable on worldwide income in India and will be required to report all foreign assets in the India income tax return (ITR).

Which tax system is better India or US?

Compared to countries such as Canada, the U.K., the U.S.A. and China, the income tax rate for India is lower. While India’s highest tax rate is 42.74%, Canada’s highest rate is 54.0%. While the U.K. and China both levy their highest taxes at 45%, the highest tax rate in the U.S.A. is 50.3%.

Do I have to pay tax on money transferred from overseas?

Do You Have To Pay Taxes On Money Transferred From Overseas? Generally, yes. You don’t have to pay taxes on international funds under a certain threshold, but if you’re importing a significant amount of capital from overseas, you should expect to pay taxes on your transfers.

Do you still have to pay taxes if you give up US citizenship?

Once you renounce your US citizenship, you will no longer have to pay US taxes. However, the US government does charge a fee of $2,350 to relinquish citizenship. You may also need to pay an exit tax if you qualify as a covered expatriate.

Can I be taxed in two countries?

If you are resident in two countries at the same time or are resident in a country that taxes your worldwide income, and you have income and gains from another (and that country taxes that income on the basis that it is sourced in that country) you may be liable to tax on the same income in both countries.

Do dual citizens pay taxes in both countries?

Yes, if you are a citizen or resident alien of the United States, you have a U.S. tax obligation, even if you’re a dual citizen of the U.S. and Canada. The U.S. is one of two countries in the world that taxes based on citizenship, not place of residency.

How much foreign income is tax free in USA?


The Foreign Earned Income Exclusion (FEIE, using IRS Form 2555) allows you to exclude a certain amount of your FOREIGN EARNED income from US tax. For tax year 2021 (filing in 2022) the exclusion amount is $108,700.

Do NRI declare foreign income?

Do NRIs have to declare foreign assets? No, NRIs are not required to disclose their foreign assets and foreign account details. However, in case of NRI income tax, you must furnish information about the foreign accounts to claim a refund of taxes if you don’t have an NRI account.

Do OCI holders have to pay tax in India?

Yes, the Overseas Citizens of India or OCI who are living in India for more than 182 days have to file Income Tax File return in India and pay tax accordingly. A person who earns in India is bound to pay tax to the government irrespective of his status of residence, citizenship or motive to stay here.

Can a person with OCI buy property in India?

A: OCI card holders can purchase residential and commercial properties in India. But they are not permitted to purchase agricultural land, including farmland or any kind of plantation property.

How long a US citizen can stay in India with OCI?

A PIO cardholder is required to register with local Police authority for any stay exceeding 180 days in India on any single visit whereas an OCI card holder is exempted from registration with Police authority for any length of stay in India.

Can OCI holder live permanently in India?

Overseas Citizenship of India (OCI) is a form of permanent residency available to people of Indian origin and their spouses which allows them to live and work in India indefinitely.

Can I keep Indian and US passport?

A. The Indian Citizenship Act does NOT allow dual citizenship. Holding an Indian passport or acquiring an Indian Passport or Traveling on an Indian passport after acquisition of foreign citizenship constitutes an cognizable offense under the Indian Passport Act and attracts penalties and imprisonment or both.

Does India allow dual citizenship with US?

The Constitution of India does not allow holding Indian citizenship and citizenship of a foreign country simultaneously.

Will India ever allow dual citizenship?

Does India Allow Dual Citizenship? The Indian constitution does not have any provision regarding dual or multiple citizenships. Instead, an Indian can acquire a second passport of a chosen country. But they are obligated to lose Indian citizenship.

What is the punishment for having two passports in India?

Holding of two Indian passports is an offence under passport act and as such the penalty levied under 12(1)(b)(xv) of passport act is a fine of Rs5000-/- and /or 3 months imprisonment. Since you have voluntarily admitted that you had two passports, you will be let off by payment of fine.

Can a child born in USA get Indian citizenship?

Parent cannot renounce kid’s US citizenship. A child born in the US is automatically eligible for US citizenship. Most Indian H1B workers are happy to see their newly born kids become citizens while they wait in long green card queues.