@nchank based on what you have said for the form 1116 -- you have major errors.
As I see it and for the tax year 2025 US, 1040
(a) Interest earnings are entered just like domestic interest -- include the bank / financial institution/ person name etc. and the amount of interest earned during 2025 ---- Note that you can ONLY use the US tax calendar. Thus you have to allocate the earnings if there was a change in interest rate between the two years.
(b) For the land sale you have to use Schedule-D --- your basis is the same as that of the donor at the time of gifting and the sales proceeds is Sales Price LESS any sales expenses such as commission, transfer tax etc. i.e. expenses that are attributable to sales effort/transaction. Note the Gain shown on Schedule-D as this is foreign source income on the immovable property alienation.
(c) Rental income is reported on Schedule-E. This schedule recognizes the rental income, all US tax allowable expenses and depreciation. The net income shown on Schedule-E is your foreign source Rental income.
Now , when you go to form 1116, Part I, line 1a --- label in the incomes and amounts in the comment area and then under col.A ( Country India ) enter the total amount of foreign source income ( this is the sum mentioned above -- interest + Schedule-D net income + Schedule-E net rental income. Ignore all the rest of Part I
Part II -- here enter the allocated Indian taxes on interest, rents and "other" ( in your case tax on capital gain per Indian ITR ). Note here that TDS usage always implies a risk -- if the final figure is different ( i.e. when the ITR is finalized ) you have to go back and file an amended return to recognize the new situation. Also note that you may have to allocate the taxes on items that go across calendar year. An example :
Rental income --
Jan 2022 thru Dec 2022 @ 1000/- per month ;
Jan 2023 thru Dec 2023 @ 1000 /- per month ;
Jan 2024 thru Dec 2024 @ 1200/- per month.
Jan 2025 thru Dec 2025 @ 1500/- per month
For Indian purposes --
22/23 rental income is 12,000 and tax is 1200/-;
23/24 rental income --- 9000 +3600=12,600 and tax is 1400/-.
24/25 rental income --- 10,800 + 4500 = 15300 and tax is 1600/-
This would mean that for US purposes and for 1116 for 2024 ---
rental income -- for 2024 --- 14,400 -- taxes paid to India -- 3 months of 2023/2024 rate + 9 months 24/25 rate---> 350 + 1200=1550.
Now , does this make sense ?
Is there more I can do for you ?
Namaste ji
pk
