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I have won a programming competition based in US, and i will be getting $800 from the US based company. They are telling me that they will pay the taxes already and will give me the full amount. Now, would i have to pay special 30% tax to Indian govt. also?

I've searched over internet but could not reach any conclusion. From what i have researched, there is DTAA b/w India and US, and i believe my earning will be regarded as prize money and will be eligible for special 30% tax. Also i am a resident of India and i am a student who never paid tax earlier.

I think the tax can be avoided under DTAA? Can someone please tell the procedure or tell me where i am wrong? Also what is the best way to not pay double tax as paying company is already paying taxes to US govt.

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programming competition based in US, and i will be getting $800 from the US based company.

Ensure that this is not a scam.

I've searched over internet but could not reach any conclusion. From what i have researched, there is DTAA b/w India and US, and i believe my earning will be regarded as prize money and will be eligible for special 30% tax. Also i am a resident of India and i am a student who never paid tax earlier.

Prize money is taxed at highest tax bracket irrespective of the income; this is currently around 34%. Under DTAA you can claim the benefit of taxes paid in the US. So effectively you may have to pay additional 4% tax in India as 30% is already paid in US. Please apply for a PAN card so that you can file the appropriate returns.

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  • What are the documents i need to ask from them at time of payment in order to avail tax benefits under DTAA?
    – Abhijeet Khangarot
    Commented Jul 4, 2018 at 10:21
  • @jokerster Don't know.
    – Dheer
    Commented Jul 4, 2018 at 10:26
  • "30% is already paid in US". The 30% has been withheld, and is a credit towards the actual tax liability of the OP, who might get a refund if the actual US tax liability is less that what has been withheld. What is taxable income in India is the full amount of the prize, not what has been received from the company (actual prize less the US income tax withholding).
    – Dilip Sarwate
    Commented Jul 4, 2018 at 19:51
  • @DilipSarwate good point.
    – Dheer
    Commented Jul 5, 2018 at 3:49

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