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    poojaarora's Avatar
    poojaarora Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 23, 2011, 12:20 AM
    Nri tax query
    I am a US resident with a green card. I received an income of $4,000 in india in my indian bank account in early 2010. I filed the tax return in india but had to pay only $80 in tax because I had very little income.
    However, I fall in 25% tax bracket in US. Wen I report this income on my US tax return, will I have to pay 25% tax on it or will the DTTA protect me because I have already paid tax on it in india.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Mar 11, 2011, 02:52 PM
    You MUST report the interest income on your U.S. return and pay the tax; you can claim a Foreign Tax Credit under "passive income" on Form 1116 for the taxes paid to India.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Mar 12, 2011, 09:40 PM

    If tax rate is higher in US than what you paid in India, you will pay the difference in US. However, actual calculation will be on Form 1116.
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