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posted Jun 4, 2019 12:08:20 PM

What is the tax implication for my US long term stock and its dividend after moving back to India? I wish to keep the stocks and its dividend for long term

I have dividend stocks and I will be moving to India next year. I wish to keep the stocks but I am not sure of tax implications of its dividend and sale of stocks in future. DO I have to file tax from India every year for dividend? if so what percentage I am looking? I am not permanent resident in USA. thanks

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1 Replies
Not applicable
Jun 4, 2019 12:08:22 PM

As for the capital gain from the future sale of your stock:  see this IRS page for the taxation of non-resident aliens:

https://www.irs.gov/businesses/taxation-of-nonresident-aliens-1

If, after you move to India, you have no "effectively connected income," that is, income from performing services or from operating a business in the U.S., then you will not have to file a tax return or pay taxes.

See also:  https://www.irs.gov/individuals/international-taxpayers/the-taxation-of-capital-gains-of-nonresident...

"If an alien does not have a tax home in the United States, then the alien’s U.S. source capital gains would be treated as foreign-source and thus nontaxable."

As for your dividends:  the US-India treaty has a preferred withholding rate of 25% for dividends. See Table 1 of this IRS Tax Treaties page for the withholding rate:

https://www.irs.gov/individuals/international-taxpayers/tax-treaty-tables