Hi,

I am from India and on H1B visa. I was working in US from Aug 2006 to Aug 2007. During the year 2007, I was paid in India as well. For the period, Jan 07 to Dec 07, I was paid about 8000$ equivalent of Indian rupees in India. Can I claim this amount as Foreign Income Exclusion? If so, which is the form to fill? Is there any tax expert who can help me in filing this?

Regards,
Naren

You would not qualify for the foreign earned income exclusion but you may be able to use the foreign tax credit if you paid foreign tax.

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Originally Posted by gnaren918

Hi,

I am from India and on H1B visa. I was working in US from Aug 2006 to Aug 2007. During the year 2007, I was paid in India as well. For the period, Jan 07 to Dec 07, I was paid about 8000$ equivalent of Indian rupees in India. Can I claim this amount as Foreign Income Exclusion? If so, which is the form to fill? Is there any tax expert who can help me in filing this?

Regards,
Naren

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Thanks for the quick reply.

I wanted to clarify this:

For the period Jan to Aug 07 when I was working in US, a total of 4065$ was deducted from my US salary and paid in India. Is that amount eligible for foreign income exclusion?

This is how it is done in my case:
For e.g. assuming a salary of 5000$ per month, an amount of 500$ was deducted every month and being paid in India and taxed as per Indian rates. But, I am taxed in the US for the entire 5000$ as well. So, I wanted to know if that amount can be excluded while I file my US taxes?

There's something very strange about the details you provided. Let me make three points:

1. There is no way that you qualify for the foreign earned income exclusion, based on the information given.

2. If you are working in the US, then this is US source income and you should be paying US tax on it.

3. You should look into why you are being taxed in India if you are being paid for work done in the US. You would not be able to claim this Indian tax as a foreign tax credit if it is for work performed in the US.

The DTAA (Double Tax Avoidance Agreement) should be used with the Indian tax authorities to STOP the taxes being paid to India.