1. What are the Tax Implications for U.S. Citizens and Green Card Holders living in India?
U.S. citizens and green card holders living in India are subject to the same tax obligations as those living in the United States. This means that they are required to report their worldwide income on their U.S. tax returns, regardless of where that income is earned. U.S. citizens and green card holders are also subject to different tax treaties between India and the United States. These treaties generally provide for some form of tax relief, such as reduced rate of taxes on certain items of income or credits for taxes paid in India. Additionally, U.S. citizens and green card holders may be able to claim a foreign earned income exclusion or a foreign tax credit for any taxes paid in India. Finally, U.S. citizens and green card holders must be aware of their obligations to comply with FATCA reporting requirements if applicable.2. Are there any Tax Credits available for U.S. Citizens and Green Card Holders in India?
Yes, U.S. citizens and green card holders in India may be eligible for certain tax credits. These include the foreign earned income exclusion (FEIE) and foreign tax credit (FTC). The FEIE allows individuals to exclude some or all of their earned income from US taxation. The FTC allows individuals to offset their US taxes with the taxes paid to another country. Additionally, individuals with a green card may also be eligible for the earned income tax credit (EITC) if they meet the eligibility requirements.3. Are U.S. taxes levied on the income of U.S. Citizens and Green Card Holders earned in India?
Yes, U.S. taxes are levied on the income of U.S. Citizens and Green Card Holders earned in India. As a U.S. Citizen or Green Card Holder, you are liable for filing U.S. taxes on all income that you earn worldwide, even if that income is earned in India. U.S. Citizens and Green Card Holders may be entitled to certain credits or deductions which could reduce the amount of tax they owe, but they must report any income earned in India to the IRS and pay applicable taxes.4. Is there a Double Taxation Agreement between India and the United States?
Yes, there is a Double Taxation Agreement between India and the United States. The agreement was signed in 1989 and entered into force in 1995. The agreement serves to alleviate double taxation of income earned in one country by residents of the other country.5. What are the filing requirements for U.S. Citizens and Green Card Holders in India?
U.S. citizens and Green Card holders are subject to the same Indian income tax filing requirements as any other Indian citizen. This includes filing a return of income on an annual basis if their total gross income in India has exceeded the basic exemption limit for the year. Additionally, they must also file a foreign assets disclosure statement with their federal tax return if they own any foreign assets or bank accounts. The filing deadline for individuals is 30th July each year.6. Are there any special tax incentives for companies owned by U.S. Citizens and Green Card Holders in India?
Yes. The Indian government provides a range of tax incentives to companies owned by U.S. citizens and Green Card holders. These include: reduced corporate tax rates, exemptions from capital gains tax, exemptions from dividend distribution tax, and deductions for capital expenditure. Additionally, the Indian government has recently announced a new initiative that will provide tax incentives for companies that invest in India’s social sector.7. What is the maximum amount of foreign earned income that is exempt from U.S. taxation for U.S. Citizens and Green Card Holders in India?
The maximum amount of foreign earned income that is exempt from U.S. taxation for U.S. Citizens and Green Card Holders in India for the 2020 tax year is $105,900.8. Are there any gift or inheritance tax implications for U.S. Citizens and Green Card Holders in India?
Yes, there are gift and inheritance tax implications for U.S. Citizens and Green Card Holders in India. According to the Indian tax law, capital gains from inherited assets are taxed at 30%. Additionally, gifts received by U.S. Citizens and Green Card Holders in India are subjected to a Gift Tax, which is levied at a flat rate of 25%.9. Are U.S. Citizens and Green Card Holders required to report foreign bank accounts to the IRS while living in India?
Yes, U.S. citizens and Green Card holders are required to report foreign bank accounts to the IRS while living in India. All U.S. taxpayers are subject to the same laws and regulations, regardless of where they live in the world. U.S. citizens and Green Card holders must declare any foreign financial accounts they have with a combined value of more than $10,000 (or its equivalent in any other currency) at any time during the year by filing a Report of Foreign Bank and Financial Accounts (FBAR).10. Are there any differences in taxation between U.S. Citizens and Green Card Holders residing in India?
Yes, there are some differences. U.S. citizens are taxed based on their worldwide income, whereas Green Card holders are taxed on their Indian-sourced income only. Furthermore, Green Card holders can avail certain tax deductions and exemptions that are available to other Indian residents, while U.S. citizens do not have access to these benefits.11. What are the restrictions on investing in the United States from India?
The restrictions on investing in the United States from India depend on the type of investment. For instance, investments in the stock market are subject to certain limits as stipulated by the Securities and Exchange Board of India (SEBI). Other types of investments, such as real estate, may require a visa or other documents in order to be legally transferred or held. Additionally, foreign investors may need to obtain approval from the Reserve Bank of India (RBI) prior to making investments in certain sectors. Additionally, foreign investors may need to comply with additional regulations related to exchange control, repatriation of funds and taxation.12. Are there any restrictions on the repatriation of funds from India to the United States?
Yes. Repatriation of funds from India to the United States is subject to Foreign Exchange Management Act (FEMA) regulations. According to the regulations, any payment from India to an overseas entity should be made only after obtaining a Certificate of Payment from the Reserve Bank of India (RBI). Additionally, all payments are subject to a number of government regulations and requirements.13. Are U.S.-sourced dividends subject to taxation by both the United States and India?
Yes, U.S.-sourced dividends are subject to taxation by both the United States and India. In the United States, dividends are subject to income tax at ordinary rates, while in India, dividends are subject to tax at the rate of 15% (plus applicable surcharge and cess).14. What are the residency requirements for U.S Citizens and Green Card Holders that want to take advantage of reduced tax rates in India?
In order to be eligible for reduced tax rates in India, U.S. Citizens and Green Card Holders must be a Resident of India as per the Income Tax Act, 1961. In order to qualify as a Resident of India, an individual must have stayed in India for a period of 182 days or more in the previous financial year (April 1 to March 31).The individual must also meet one of the following criteria:
1. Stayed in India for at least 365 days during the four year period preceding the relevant financial year; or
2. Stayed in India for at least 60 days during the relevant financial year and at least 365 days during the preceding four years.
15. Are there any capital gains tax implications for U.S Citizens and Green Card Holders residing in India?
Yes, U.S citizens and green card holders residing in India may be subject to capital gains taxes in both India and the United States. Specifically, capital gains realized in India are subject to India’s tax laws, and capital gains realized in the United States are subject to U.S. tax laws. To minimize any double taxation, individuals can take advantage of various tax treaties in place between the two countries.16. Can U.S Citizens and Green Card Holders claim a foreign tax credit on taxes paid to India?
Yes, U.S. Citizens and Green Card Holders can claim a foreign tax credit on taxes paid to India, as long as the taxes are imposed on them by India and are the type of income taxes that are eligible for the foreign tax credit. The foreign tax credit is claimed on Form 1116 of the U.S. tax return and can be used to offset taxes owed to the United States for the same amount of income.17..Are there any estate or death taxes associated with leaving a legacy to descendants of U.S Citizens and Green Card Holders in India?
Yes, there are estate and death taxes that could be associated with leaving a legacy to descendants of U.S. Citizens and Green Card Holders in India. The taxes will depend on the particular circumstances of the person leaving the legacy and how the legacy is structured. The estate and death taxes in India are determined by the central government and can vary from state to state. Additionally, gifts given to individuals outside of the United States may be subject to gift taxes in India, depending on the value of the gift and the relationship between the giver and the receiver. It is important to consult a tax advisor familiar with both U.S. and Indian tax laws to ensure that all applicable taxes are properly accounted for.18..What are the tax implications associated with owning a home, rental property, or business assets in India for U.S citizens and green card holders?
The tax implications associated with owning a home, rental property, or business assets in India for U.S. citizens and green card holders are the same as those associated with other types of investments—income generated by such investments is subject to taxation in both India and the United States. In addition, U.S. citizens and green card holders who own real estate in India are subject to India’s Foreign Exchange Management Act (FEMA), which requires them to file a Foreign Exchange Return (FER) annually with the Reserve Bank of India (RBI).Income generated from rental property is taxable in the same way as any other income earned in India, according to the relevant income tax laws in India. The income tax rate applicable for individuals depends on their income bracket and residence status (resident or non-resident).
Business assets owned by U.S. citizens and green card holders are subject to the same taxation rules as those applicable to Indian citizens. However, due to certain exemptions available under double taxation avoidance agreements between India and the United States, certain business income may be exempt from Indian taxes.
In addition, capital gains resulting from the sale of Indian assets such as real estate or business assets are subject to taxation in both countries based on the applicable taxation laws of each country. The rate of capital gains tax varies depending on the asset class and duration of ownership. To avoid double taxation, taxpayers can take advantage of the foreign tax credit, which allows them to claim credit for taxes paid in India against taxes payable in the United States.
English 
Español de México