How and where to declare Dividend income from RSU listed in US in ITR2 for AY 2023-24

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Hi, How and where to declare Dividend Income from foreign RSU (US) accrued in Calendar year 2022-23 in ITR2 for AY 2023-24 ? TDS at flat rate of 25% is already deducted at US end and corresponding  form 1042-S is available.

 

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Hey! Here's how you can declare dividend income from foreign RSUs (US) in ITR-2 for AY 2023-24:


Step-by-step to declare Foreign Dividend income (like from US RSUs) in ITR-2:

  1. Go to Schedule FSI (Foreign Source Income)

    • This is where you report income earned outside India.

  2. Enter details of Foreign Dividend:

    • Country: USA

    • Nature of income: Dividend income

    • Gross amount of dividend received (before TDS) in INR (convert using prescribed exchange rate)

    • Tax deducted abroad (TDS in US, like 25%) also to be reported here

  3. Claim Foreign Tax Credit (FTC) under Schedule FSI:

    • The tax deducted abroad (shown on form 1042-S) can be claimed as FTC in India (subject to the DTAA provisions and maximum credit allowed).

    • Enter the amount of foreign tax paid (TDS at 25%) in the relevant columns.

  4. Currency Conversion:

    • Convert USD dividend and TDS amounts to INR using the prescribed RBI/Income Tax exchange rate for the relevant financial year.

  5. Total income from foreign sources will be added to your total income.


Important Notes:

  • Dividend from foreign RSUs is income from other sources in India, taxable at your slab rate.

  • TDS at US end is not a final tax in India, but credit can be claimed against Indian tax liability on that income.

  • Keep your Form 1042-S and proof of dividend receipt handy as supporting documents.

  • Also mention dividend income in Schedule OS (Income from other sources) in ITR as a summary but main details are in Schedule FSI.


If you are using online ITR utilities or software, they will have a specific section for Foreign Income under Schedule FSI where you can enter these details.


Would you like me to help you with a sample data entry or a step-wise screenshot guide for the ITR form?


CCI Pro

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