Hi,

I would like to know how and where to claim the deductions allowed under the India-US treaty. Do I add both the standard & personal deductions and put it under exemptions of form 1040? Also, do I claim both the deductions (3200 + 5000=$8000) on the state tax form as well?

thanks in advance!

Pinke:

If you are filing Form 1040 as a resident alien, you CANNOT claim the treaty exemptions under the India US Tax Treaty. You get the $3,200 personal exemption and the $5,000 standard deduction as a resident alien anyway, so nothing is lost.

As for the state return, each state has its own standard deduction and personal exemption, usually much lower than the federal amounts.

I'm sorry I should have stated that I am filing 1040NR.

Assuming you are on a F-1 visa, on Form 1040NR on the line where you listed your itemized deductions, claim $5,000. To the left on the dotted line, write in "Standard Deduction allowed under U.S.-India Tax Treaty".

Yes, I was on F1 visa throughout the year. So you're saying that I claim only the standard deduction and NOT the personal deduction on the 1040NR?

Thanks, Atlanta Tax Expert for your invaluable help. It is nice to know that there are still helpful people like you who are willing to advise and coach even though you get the same questions over and over again.

No, you can claim BOTH. Claim the standard deduction of $5,000 on the line marked "ITEMIZED DEDUCTIONS" and claim the personal exemption of $3,200 on the line two lines down marked PERSONAL EXEMPTION.