I am an Indian citizen, currently living in US. I am on H1-B visa and employed in a company. I stay there pretty much all year long. This means I will be classified as an RA (Resident Alien).
I have a savings bank account in India. It has Rupees One Lac (Rs. 100000). The interest it earns per year is Rupees Four Thousand (Rs. 4000).
Now, in India up to Rupees Two Lacs, it attracts no tax. So, the aforementioned interest attracts a tax of Rupees Zero.
Question: Do I have to declare this interest in US as part of my tax filing?
I earn (through various interests out of Savings Bank account or Fixed Deposits) a total of Rupees Three Lac (Rs. 300000) per annum.
Now, in India I have to pay a tax of Rupees Ten Thousand (Rs. 10000). This is calculated @ 10% of the amount above the base amount of Rupees Two Lac. Now, do I have to declare the earning of Three Lac in US and pay tax for the same as well? Also, is it OK (per Double Taxation Avoidance Agreement) that I can deduct the amount of tax paid Rupees Ten Thousand (Rs. 10,000) converted into US dollars while showing the total income of Rupees Three Lac (Rs. 300000) earned in India?
If I have a land, which is worth Rupees Ten Lacs (Approx $20,000 @ Rs.50/USD), do I have to file an FBAR? (Note: This land does not earn any income).
Please do clarify!