I am an Indian Resident working for a US Company as an employee. The work location is Bangalore, India.
The salary is credited by US company after Deduction of tax as per US laws then credited to the Bank account in India.
I am in India for more than 180 days and I guess I would be treated as Resident Indian [and not "Non-Resident Indian"]
How should I claim credit of tax paid in US when accounting periods for US are calander year Jan to Dec and in India are April first year to March Next year.
Where should I disclose the taxes already deducted by US company and paid to IRS when I am filing Returns in India. I believe dual tax avoidance should allow me a tax credit?
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1 Answer
From what I understand, you are an Indian Citizen, working directly for a US based company. The work location is in India. You are being paid in USD after deducting for US Taxes. You have no presence in US [ie don't have a house or Citizenship of any form]
If the above understanding is right, your US Employer should not be deducting taxes as there is no tax obligation in US.
Your tax obligation would be in India and you would need to pay taxes in India on your own.
http://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_USA.htm Refer Article 15.
Related info on US IRS http://www.irs.gov/publications/p901/ar02.html search India section