Hi,

I am an Indian. I came to US on 20th Oct 2008. I have spent more than 180 days in India (For the current Indian financial year). Am I suppose to pay tax both in India and US?

If yes then, is there any way to get some tax exemption.

Thanks
Tank

On L1, your income is subject to SS tax, Medicare tax and income taxes in the U.S. If you are single, you can only file non-resident tax return. You will not get any credit even if you must report this income on the India tax return.

For India tax, you can post your question at mytaxes - Index

While you are liable for Social Security and Medicare taxes (and you will NOT get those taxes back, nor will you get any credit or benefit for paying them), it is possible that you will have NO tax liability for the income earned in the U.S. in 2008.

The reason is simple: you will get at least a $5,450 personal exemption, plus possible deductions for moving expenses and maybe even daily living expenses. If, in total, these expenses exceed your taxable U.S.-sourced income, no income tax will be due.

You will still need to file Form 1040NR, but you quite likely will get all the withheld federal income taxes back as a refund.

You can also elect to be treated as a resident of the U.S. for the portion of the year you were present in the U.S. but it would probably not be worthwhile to do this.

Correction of error: The personal exemption is $3,500 ($5,450 is the standard deduction).