I am Indian citizen who was working in US from 15/11/15 to 31/03/16 i.e 137 days, that means I am resident tax payer like all other Indian citizens for FY15-16.
As per tax treaty they clearly mention I can claim credit for federal tax in India, but do not mention if other taxes like state tax, medicare tax, social security tax, etc can be claimed as deductions from income or non creditable deductions from tax?
Logic 1 - India may not get tax credit for other taxes but can exempt the taxes that I have paid already on the income.
+ total tax on India + us as per Indian income tax - federal tax - state tax - medicare tax - social security tax - TDS deduced on Indian salary _____________________________________ = my Net total tax? ***Or***
Logic 2 - If not able to give me exempt in tax then atleast allow exempt of taxes paid in income?
+ gross income in India + gross income in us - state tax - medicare tax - social security tax - deductions on Indian income as per 80C etc etc _____________________________________ = my total global income?
****Important**** Could you please provide me any citations which refer that state tax, social security tax & medicare tax paid in US can be considered as deductions from global income? I tried to search lot but could not find any?
If I do not get deductions on gross income or income tax - I will have to pay double tax except federal tax which is just 12% in USA, which means effectively I will have to pay 42% tax on my total income which is insane.
Please respond to me, as I have already missed advance filing date and do not want to get more penalty.
Thanks for the reply in advance.