[sarunkumaar]

Hi,

I am working in US from Apr08 to Ot'08. I am getting both my Indian & US salary in Dollar. I am not paying any taxes for Indian salary in India whereas I am paying taxes for that in US. I am planning to return back to India by this month end. I stayed more than 180 days in US for this financial year(Indian financial year). Do I need to pay any taxes for the period (Apr'08 to Oct'08) salary earned in US account in India? If so I need to pay at least another 5 month of my Indian salary as tax in India.

Thanks,
Arun

[AtlantaTaxExpert]

Arun:

You will file as a dual-status alien because you have met the 183-day Substantial Presence Test. This assumes that you are on either a L-1 or H-1 visa.

That being the case, you are definitely liable for income taxes on income earned from a U.S. source.

If you are NOT paying Indian taxes on your Indian-sourced income, you MAY be liable for U.S. taxes on that income as well. The Indian-sourced income MUST be taxed by one government or the other. Logically, if you are paying U.S. taxes, the Indian government will NOT tax the salary. The same applies if India is taxing the salary, in that U.S. taxes should NOT apply.

[MukatA]

1. Income you receive while in the U.S. is subject to U.S. income tax. If you will leave the U.S. in October 2008, you will file non-resident tax return.

2. You may have to report this income on India tax return if you are resident in India for FY 2008-09 that is spend 182 days in India.

[AtlantaTaxExpert]

Disagree with Mukat on this one.

You have met the Substantial Presence Test (SPT), so you MUST file an expatriate dual-status return, where the return is Form 1040NR and the tax statement is Form 1040.

The non-resident return is an option ONLY IF you do NOT meet SPT.

[MukatA]

Yes, you will file Dual Status return.