@girigiri
Answering one of your questions but also checking how you ended up filing:
1. For INDIA interest paid by banks, as we all know, you will not get any 1099-INT. So as a filer it will be your responsibility to get the actual interest paid by INDIA banks to you. Now to do that, one needs to look at their bank account statements and look for any interest line items and add them up. Usually I like to keep a yearly (US financial year) spreadsheet of all my INDIA income (e.g bank accounts, rental, etc.) , account MAX balance (during any time of the year), the interest they earned and any tax that was deducted at source (TDS). I then use this sheet to complete my US tax returns and also keep it for my records (along with statements, etc).
2. For the interest earned on INDIA tax refund, I would assume that it will get added as an income to the US taxes. Also I assume it should be shown at income in the year it hits your bank account in INDIA.
Having said above, please do share how you handled your tax situation, as it will help me and others learn.
