Since the income is taxable in India I assume it would be taxable in the US if earned here, so you would have to report it as such. From what you describe it would be treated as pension income, which you can report in TurboTax by preparing a substitute Form 1099-R as follows:
- Find the Retirement Plans and Social Security menu option
- Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
- Choose Add Another 1099-R
- Choose I'll type it in myself
- On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
Enter the distribution in box 1 and 2 and choose code 7, normal distribution, for the type of distribution. You are entitled to a foreign tax credit on up to the amount of US tax you pay during the year on your foreign income.
To apply for a credit for foreign taxes paid or accrued during the year:
1. From the Federal section of TurboTax, go to the Deductions and Credits section
2. Find Estimates and Other Taxes Paid
3. Choose Foreign Taxes
4. Indicate that you paid foreign taxes or have credits from prior years
5. Work through the section until you see an option to take a deduction or credit, the credit is usually better
6. Complete the rest of the section
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