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I have received a royalty from one of the projects I worked on when I was a student at USA University. For the last 5 years, I have moved back to my home country India where I now live and work.

I wanted to understand in this case :

  1. what taxes do I need to pay
  2. do I need to report my India income to IRS
  3. do I need to report US Income to Indian Income Tax.
  4. What are the tax treaty benefits
  5. Do I need to submit W8BEN to my Univ.

Thank you

2
  1. You don't need to report India income to US or IRS
  2. Yes you need to declare additional income and pay taxes as per tax brackets.
  3. There is DTAA, dual tax avoidance agreement between India and US, broadly covering US federal taxes
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  • Thank you Dheer. Will the Univ withhold 30% of my taxes? and then again pay tax in India as well. I am trying to read the DTAA for royalty case. – j10 Jul 8 at 8:29
  • @j10 It depends on how the tax authority treats it as accrued, I.e. your residency status as of 5 years back when the contribution was or as of today... check with university if w8ben form is applicable for getting an exemption status... consult a CA if the amount is significant. – Dheer Jul 9 at 13:31
  • I need to submit a w8ben form. One of the field on w8ben form is asking for % rate of withholding as per the DTAA. Do you know any chance what value that would be. Its for a research project which is now a software company. =======================================+ "Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article and paragraph ----- of the treaty identified on line 9 above to claim a ---- % rate of withholding on (specify type of income)" – j10 Aug 25 at 12:35

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