Taxability of Salary of US in India
This query is : Resolved
27 May 2010
Whether salary due & received in US by a Indian Resident will be taxable in India.
Taxes on salary already paid in US.Is there any DTAA benefit. Pl. answer as soon as possible
Taxes on salary already paid in US.Is there any DTAA benefit. Pl. answer as soon as possible
Guest
Guest
(Expert)
27 May 2010
yes it will be taxable in India.
Under Income Tax Act , there is specific provision for relief in case of double taxation .
In that case ,section 91 of the I T Act provides relief from double taxation. Provision of Section 91 of the I T Act says
“(1) If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal”
So, you should show the income earned in US claim tax credit of tax paid in US for that period. Therefore, it is in your interest , that necessary tax deduction or payment certificate is kept ready in your record which may be required by Income tax department in case your case is scrutinised.
Under Income Tax Act , there is specific provision for relief in case of double taxation .
In that case ,section 91 of the I T Act provides relief from double taxation. Provision of Section 91 of the I T Act says
“(1) If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal”
So, you should show the income earned in US claim tax credit of tax paid in US for that period. Therefore, it is in your interest , that necessary tax deduction or payment certificate is kept ready in your record which may be required by Income tax department in case your case is scrutinised.
Message likes :
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29 May 2010
DTAA between USA & India is there. Whether the answer will remain same.
26 July 2025
Yes, there **is a DTAA (Double Taxation Avoidance Agreement) between India and the USA**, and it impacts how your US salary is taxed in India.
Here’s how it works:
### 1. **Taxability in India:**
* As an **Indian resident**, your global income—including salary earned and received in the USA—is taxable in India.
* So, you must disclose your US salary in your Indian Income Tax Return.
### 2. **Tax paid in USA:**
* Since you have already paid tax on that salary in the US, you can avoid double taxation by claiming relief under the India-USA DTAA.
### 3. **Relief under DTAA:**
* Under the DTAA, you get **credit for the tax paid in the USA** against the Indian tax liability on the same income.
* This means you don’t pay tax twice on the same income.
* The credit is usually limited to the **lower of the two tax rates** (India or USA) on that income.
### 4. **How to claim:**
* Disclose your US salary and the foreign tax paid while filing your Indian tax return.
* Attach necessary documents like **tax payment certificates from the USA** to claim credit.
* The credit is allowed under **Section 90 of the Income Tax Act**, which applies when there is a DTAA.
---
### Summary:
* Salary earned in USA by an Indian resident is taxable in India.
* Tax paid in USA can be claimed as credit to avoid double taxation.
* This credit is given as per provisions of the India-USA DTAA and Section 90 of the Income Tax Act.
If you want, I can help you draft a sample disclosure or calculate the tax impact based on your figures. Would that help?
Here’s how it works:
### 1. **Taxability in India:**
* As an **Indian resident**, your global income—including salary earned and received in the USA—is taxable in India.
* So, you must disclose your US salary in your Indian Income Tax Return.
### 2. **Tax paid in USA:**
* Since you have already paid tax on that salary in the US, you can avoid double taxation by claiming relief under the India-USA DTAA.
### 3. **Relief under DTAA:**
* Under the DTAA, you get **credit for the tax paid in the USA** against the Indian tax liability on the same income.
* This means you don’t pay tax twice on the same income.
* The credit is usually limited to the **lower of the two tax rates** (India or USA) on that income.
### 4. **How to claim:**
* Disclose your US salary and the foreign tax paid while filing your Indian tax return.
* Attach necessary documents like **tax payment certificates from the USA** to claim credit.
* The credit is allowed under **Section 90 of the Income Tax Act**, which applies when there is a DTAA.
---
### Summary:
* Salary earned in USA by an Indian resident is taxable in India.
* Tax paid in USA can be claimed as credit to avoid double taxation.
* This credit is given as per provisions of the India-USA DTAA and Section 90 of the Income Tax Act.
If you want, I can help you draft a sample disclosure or calculate the tax impact based on your figures. Would that help?
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