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    mahesh_2good's Avatar
    mahesh_2good Posts: 1, Reputation: 1
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    #1

    Apr 29, 2007, 04:03 PM
    Can I claim deductions in US on Indian Home Loan
    I'm a US Permanent Resident and am planning to buy a house in India with loan taken from an Indian Bank. I want to know if I can claim deduction in US for this mortgage payment.

    Thanks
    Mahesh
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 30, 2007, 12:33 PM
    Actually, you CAN claim such mortgage interest, but you will be required to identify from whom you got the loan.

    You may also be required to withhold 30% of the monthly payment and send it to the U.S. government to make sure the Indian Bank pays its taxes on the money received from a U.S. source, i.e. YOU!
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #3

    May 1, 2007, 06:27 PM
    I agree with ATE. As long as the loan would have qualified for a deduction if the property were in the U.S. then you can deduct the interest expense if the property is located outside the U.S. Also, under the U.S.-India Income Tax Treaty, the withholding tax rate on the interest paid would be reduced from 30% to 15%.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    May 1, 2007, 10:43 PM
    I concur with IntlTax on the 15% rate.
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