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1) As a H1b holder, if I have rental income in India and need help with the following:
a) Indian tax law exempts first INR 250,000 and Indian tax law allows 30% deductions on rental income.
b) When filing tax in USA, use tax credit in India and pay the difference in US if owe.
c) For example, the rental income is 600,000 INR , deductible is 30%, so the net income is 420,000. So the effective tax rate is 5% of (420,000 less 250,000) = 85,000, If US tax comes around 120,000 INR eq. I need to pay only 120,000 - 85,000 = 35,000 INR eq.

2) As H1b holder, when I buy and sell investment houses in USA, do I need to pay foreign taxes according to https://www.irs.gov/individuals/international-taxpayers/firpta-withholding or just pay taxes in the regulat tax brackets.

  • What is your tax residence? Are you resident alien in US for tax purposes? What is the question in item 1 – Dheer Nov 27 '18 at 1:23
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    If you are a US resident for income tax purposes, then you have 600,000 INR of Indian income on which you have paid (or will pay) 85,000 INR in tax to India. So, for US tax purposes you need to include 600,000 INR of income (converted to US$) on your US income tax return and pay taxes on that amount (at whatever rate it works out for you) in US$ to the IRS but you get a credit in the amount of 85,000 INR (converted to US$) against what you owe to the IRS – Dilip Sarwate Nov 27 '18 at 3:26

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