@pk-ji
Thank you very much. More clarifications embedded with your response.
As I understand from you short post, you a US person ( citizen/GreenCard/ Resident for Tax purposes ) have sold equities ( when acquired, when sold,) paid Indian tax ( finalized or just the usual 20% or more collected at source).
[murali] Correct. I am a US citizen and residing in the US. I have a brokerage account in India that is managed by a management company. We have already filed our Indian tax returns & paid the taxes in India (not just collected at the source). Now we are in the process of filing our 2023 US Income tax.
Now the question you are raising is if you are eligible to use Foreign Tax Credit to mitigate the double taxation of this foreign source income ( I am assuming here that these equities are bought / sold through your broker in India and/or these equities are placed/ listed ONLY in India.
[murali] My question is not about eligibility. I get credit on taxes paid on rental income and dividends from the stocks I own. What is not clear if I can take credit on capital gain taxes on STOCKS I have sold. I know I CAN take credit on the taxes paid on gains from real properties (e.g. real estate) but it is not clear to me if I can take credit for taxes paid in India on the capital gains associated from the Indian stocks in India.
While , I await your answer (s ) to the questions I have asked ( the parenthetical items above ), in general because India and US have a Tax Treaty in place , including the double Taxation clause, YES indeed you could use the Foreign Tax Credit/ Deduction to ameliorate the effects of double taxation.. Whether you should use the form 1116 really depends on your filing status and the quantum of the total foreign tax levied / paid on this foreign income..
Because you have both short-term and long-term gains ( per US tax laws ) you need to be careful to make sure that your total foreign source income and foreign taxes paid thereon be properly allocated. / accounted for.
[murali] Looking forward your reply. Thanks.
