This is gonna be somewhat difficult, sorry :)
I (Indian citizen residing in India) am investing in my US based employer in the form of Employee Stock purchase plan, where company gives shares at discounted rates. It so happens that there is salary deduction every month that gets converted in dollars and finally purchase of stock.
When this company declares dividend, it appears in the form of cheque in USD. I request the company abroad to send me in INR and they charge me a processing/conversion fee and issue me a cheque from Indian bank in INR which is easily credited in bank account in India. Usually, dividend is declared three times a year but I wait till entire dividend amount accumulates to above 10 USD and then place a conversion request for the amount in a single cheque. Until then the USD cheques keep piling in my drawer, ultimately torn away with replacement cheque.
Hope the above is clear!
1. In such scenario, is the dividend taxable in the year it is declared or the year it is credited in bank account ?
2. How is the dividend tax calculation done ?
3. Do I owe any tax to the US goverment ? They made some deductions (and gave me W8BEN form) in return saying some taxes are withheld.
Thanks
CAclubindia
