Dual Resident Status, how to apply tie breaker rules of US-India Tax treaty

Shirish Kulkarni (1 Points)

22 November 2021  

Dear All:

I entered USA as a visitor in late 2019 (sept 2019). I applied for a family based green card in Jan 2020. I was in the USA entire year 2020 . I received Green card in July 2021. However, due to certain family circumstances, I had to move back to India. I moved to India on July 31st, 2021. I have returned my green card after returning to India. 

1) For the US tax purposes, am I a resident or non-resident or part year resident?

I can be  a US tax resident because I had green card and I resided in US for more than 183 days in USA.

I can be a Indian resident because during tax year 2021-22, I stayed in India for more than 183 days.

 

2) Can I use tie breaker rules:

Text from Technical Explanation of US_India Tax Treaty

If, under the laws of the two Contracting States, and, thus, under paragraph 1, an
individual is deemed to be a resident of both Contracting States, a series of tie-breaker rules are
provided in paragraph 2 to determine a single State of residence for that individual. The first test
is where the individual has a permanent home. If that test is inconclusive because the individual
has a permanent home available to him in both States, he will be considered to be a resident of
the Contracting State where his personal and economic relations are closest, i.e., the location of
his "center of vital interests". If that test is also inconclusive, or if he does not have a permanent
home available to him in either State, he will be treated as a resident of the Contracting State
where he maintains an habitual abode. If he has an habitual abode in both States or in neither of
them, he will be treated as a resident of his Contracting State of citizenship. If he is a citizen of
both States or of neither, the matter will be considered by the competent authorities, who will
attempt by mutual agreement to assign a single State of residence.

For tie breaking:

I have a permanent home in India. Financially also, India is my center of vital interest. Also since, I have returned green card and staying in India, when I used to stay before temporarily moving to USA, India is my "habitual abode"

3) For the Indian tax purposes, am I a resident or non-resident or part resident?

 

Please let me know.

Kulkash