Hi,
I am an international student from India (on F1). I am studying in Texas and I am doing my summer internship (on CPT) in Ohio.
Do I need to pay federal and state taxes? In case I am not supposed to pay any taxes, I would prefer that my employer doesn't withhold any taxes. What documentation do I need to fill for this?

Thanks a lot for your help!
R

On F1/OPT, you income is subject to federal income tax and state income tax. You must file nonresident tax return and Form 8843. Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

MukatA, I checked the link and other threads as well. They do speak about personal exemption. Also, I am on CPT during summer internship and not OPT as you mention.
I am positive that the tax obligations are different for an international student from India on CPT.

Rohit:

You are operating under a mistaken impression. The tax obligations for an international student on CPT are identical to that of a student on OPT, in that you are obligated to pay federal and state income tax (though Texas has NO state income tax), but are exempt from FICA (Social Security and Medicare) taxes.

Thanks you both for the help.
I guess I was getting confused by the use of word exemption at different places.

You will file nonresident tax return Form 1040NR or 1040NR-EZ and will get personal exemption of $3650 in 2009. Also based on tax treaty with India, you will claim standard deduction of $5700 instead of itemized deduction. So you will not pay any federal income tax if your income is 2009 is $9350 or less.