@muralinn -ji, thank you very much for your detailed response to my questions.
1. Gains from alienation of assets ( equities, real-estate business etc. ) and taxed by a foreign taxing authority and whom has a tax treaty with the USA is eligible for foreign tax credit / deduction. IRS instructions form 1116 is my ref. Please see pages 2. 3 and 6 for this ---> 2023 Instructions for Form 1116 (irs.gov)
2. Note that the gain amount that is taxed by both US and that other country ( India in your particular case ) is the gross amount of foreign source income ( it is actually the lesser of the gain per US laws and that per the tax laws of the other country ). For purposes of form 1116 the taxes paid is the actual amount paid/accrued/ levied by the other country.
3. Note that the form 1116 recognizes the total foreign taxes paid but limits the amount allowable for the tax year to the lesser of actual taxes paid and "allocated" US taxes paid/levied on the foreign source income. Thus it is generally not 100% of the taxes paid to a foreign taxing authority. That is why the questions about the filing status and the quantum of the foreign taxes paid ---- the safe harbor amount being US$300 per filer.
Does this make sense ? Is there more I can do for you ? If you need more , please feel welcome to add to this thread OR you can PM me if you feel the situation will not be of interest to general public ( again no Personally Identifiable Information please ).
Namaste Murali ji
pk
