[aalap2785]

Hi, I am from India and I am expecting to go to the US for 2 to 3 months on a B1 visa. I want to know whether the reimbursements which I get from my Indian employer for my stay in the US are liable to any tax in the US or India. Can you help me out?

[AtlantaTaxExpert]

If you receive all of your money from your company which is located in India, AND if you stay in the U.S. does NOT exceed 183 days, then you will be liable for NO taxes to either the United States or the state in which you will visit.

This is covered by the U.S.-India Tax Treaty and is known as the "183-day" rule.

You are tax-exempt because your pay and reimbursements are sourced in India, NOT the United States.

Now, if you receive the pay and/or reimbursements from a U.S. company or from a U.S. subsidiary of your Indian employer, then your pay and reimbursements are sourced in the United States. In that case, then you ARE subject to both U.S. federal and state income taxes, though you can also claim daily living expenses to help offset any tax liability.

[aalap2785]

Hi Atlanta,

Thanks a lot. That was indeed very useful. Can you also tell me whether my savings from my 3 month US visit would be taxed in India?

[MukatA]

ARTICLE 16. Dependent Personal Services
Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U.S. income tax if the residents meet three requirements.
• They are present in the United States for no more than 183 days during the tax year.
• The income is paid by, or on behalf of, an employer who is not a resident of the United States.
• The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States.

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

[AtlantaTaxExpert]

Aalap:

To answer your question, no, the interest on your savings is NOT taxable.