Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Lower Indian TDS at source
The India-US treaty caps Indian tax on income like interest and dividends. To get the lower rate, give the Indian bank or company your US TRC (Form 6166 from the IRS), Form 10F, and your PAN. Otherwise they deduct at the full Indian rate and you reclaim later.
Then relieve it in the US
Income India is entitled to tax — for example Indian dividends or rent — is also reportable in the US, but you claim a US foreign tax credit for the Indian tax paid, so you are not taxed twice. Keep your Indian TDS certificates as proof.
A worked example
Example: you earn ₹4 lakh of Indian dividends. With your TRC and Form 10F, the company withholds at the treaty rate rather than the higher domestic one. You then report the dividend on your US return and offset the Indian tax via the foreign tax credit. Treaty rates and US rules differ by income type — confirm both sides. A practical point for US residents: India’s financial year (April–March) and the US calendar year do not line up, so matching Indian tax to the right US return takes care, and you may need to keep records that bridge the two years. Capital gains on Indian property or shares are generally taxable in India first, with the US giving credit — not the other way round. Our NRI tax service handles the Indian side.