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If you are a US resident you must file a US tax return. Resident (for tax purposes) means that you are a citizen, a green card holder, or a resident alien who passes the substantial presence test.
If you are a non-resident, you must file a US tax return for your US-sourced income. Non-resident means you are an alien who does not pass the substantial presence test, which usually means that you were in the United States you lived in the United States less than 183 days counting all of the days this year and 1/3 of the days last year. US sourced income generally means income that was paid to you while you were living and working in the US, and generally does not include income paid to you while you were living overseas, even if the company is based in the US. TurboTax cannot prepare a tax return for a non-resident alien, this is form 1040-NR and TurboTax does not include it. You will have to find another software provider.
If you are subject to US taxation and file a tax return, that would be the proof that you show to your home country, the completed and signed tax return.
Financial year in India is April to March. I started earning in USA in Feb. Now I will file taxes in USA next year but I have to file taxes in India now (and declare US income). So I don’t have US tax return. Also tax return would not be able to show taxes specifically paid in Feb and March.
@pk is quite knowledgeable about international tax situations and may have a suggestion for this situation when she is next in the forum. (Thanks, pk!)
Given the timing of things, I suspect that you have not actually paid any US tax yet and have nothing to report in India. Your US tax is only calculated on your tax return, and any withholding you have paid so far is only an estimate that might be wildly inaccurate. For example, withholding will only be approximately correct if you work the same job at the same average monthly salary for the entire year. If you were to quit midway through the year, you might owe much less than was withheld, or if your marital status changes, you might owe much less or much more than was withheld.
I suspect the correct answer is that for your India tax year ending March 2021, you have paid no US income tax. For the India tax year ending March 2022, you would report the results of your US 2021 income tax return that you will prepare next winter. However, I agree that @pk is the best international tax expert here.
@ashishjwr , having read through and generally agreeing with the comments by @mesquitebean and @Opus 17 , I would like to add the following assumptions:
1. You are a citizen of India; residing in the USA since Feb (1st? ) of 2020;
2. You have not been present ( days present for any reason ) in the USA during 2019, 2018; --- "returning member" implying you have filed US return before ?
3. You were not married to a US resident ( Green Card, or resident for tax purposes ) or citizen prior to your entry to the USA with H-1B/work visa on Feb (1st ? ) and with whom you intend to file a joint return for 2020;
4. you are employed by a US entity
Please can you confirm and/or correct these assumptions ?
Under article 16 of US/India tax treaty- --- bolded words are my interpretation, underlined ones are operative ones:
" 2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a
Contracting State (INDIA ) in respect of an employment exercised in the other Contracting State (USA) shall be taxable
only in the first-mentioned State (INDIA) if:
(a) the recipient is present in the other State (USA) for a period or periods not exceeding in the
aggregate 183 days in the relevant taxable year;
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the
other State; and
(c) the remuneration is not borne by a permanent establishment or a fixed base or a
trade or business which the employer has in the other State "
This would allow India to tax any earnings from the USA during the 2019/2020 Indian tax year-- thus while India recognizes that the source of income from 1st Feb through Mar 31st are foreign source, it still asserts the right to tax this solely. In practice , all US tax treaties while protecting the tax payer from double taxation, still will not circumvent its own tax laws. Thus India will tax the "foreign" sourced income that falls within its tax year definition ( US income during Feb and March ).
Then under article 25
"ARTICLE 25
Relief from Double Taxation ...........
2. (a) Where a resident of India derives income which, in accordance with the provisions
of this Convention, may be taxed in the United States, India shall allow as a deduction from the
tax on the income of that resident an amount equal to the income tax paid in the United States,
whether directly or by deduction. Such deduction shall not, however, exceed that part of the
income tax (as computed before the deduction is given) which is attributable to the income
which may be taxed in the United States.
Note that this article, in operation, is identical to the USA modus for allowing foreign tax credit or deduction. The difference ( if any ) may be in the limiting of the tax credit --- equivalent to the tax that it would have attracted in India -- and allowance of carry back / forward as allowed in the US .
The definition of resident ( for the applicability of the tax ) is in article 4 and generally is consistent with the use of the term in the USA.
This leaves us only with how to prove that you have paid taxes to the USA on the income during the period in question ( your original question ). My contention here is that you do not need to provide any documentation --- you declare your income and the taxes prorated / allocated on that amount taxable by India. Note that this cannot be done till you have prepared your return for the USA and based on effective tax rate -- this allows for your deduction/ exemptions/ credits etc. that may be applicable to you. Keep a good record of how you created this effective tax and allocation thereof to the income that is being taxed by both countries. US will not generally allow you to resource the double taxed income to India and thereby get the foreign tax credit against Indian tax.
Is there more I can do for you
stay safe -- Namaste
pk
Hi @ashishjwr, what did you do for your situation?
I'm in the same boat this year. I came to the USA in February. My CA says paystubs are not accepted as proof. What documents did you submit while filing your tax in India?
@Anonymous , is there something I can do for you ?
I will circle back once I hear from you .
pk
@Anonymous wrote:
Hi @ashishjwr, what did you do for your situation?
I'm in the same boat this year. I came to the USA in February. My CA says paystubs are not accepted as proof. What documents did you submit while filing your tax in India?
Pay stubs show withholding. For social security and Medicare tax, that is the actual tax you paid, but for state and federal income tax, withholding is only an estimate of the taxes you might owe, and your 2024 tax bill is not final until you file your return in the spring of 2025. (At which point you might owe more tax or get a refund, depending on whether your withholding was less or more than your actual tax.)
@Anonymous , noting the answer by my colleague @Opus 17 , I am just wondering :
(a) if you are a resident of USA, then why are you filing a return for India ( unless you have had income in India for the current Indian tax year -- April 1 2023 through Mar 31st 2024 ?
(b) A citizen of India and residing in the USA with income from US sources ONLY may or may not have to file a return in India.
Please tell more about your income sources, visa under which you are in the USA, the date you entered the USA and if this was your first entry within the last three years. And if you "must" file an Indian return then the reason for using Indian version of double taxation clause ( US-India Tax Treaty )?
I will circle back once I hear from you
@Opus 17 Thanks, that makes sense. So for now, I need to declare my income in the US while filing taxes in India and claim returns for these 2 months in the spring of 2025 when I file my taxes in the US correct?
@pk Yes, I had income in India from April 2023 to Jan 2024.
I entered the USA in Feb 2024 & yes, this was my first entry. I'm salaried currently
@Anonymous , please tell me more about your situation --- Iam not sure I am understanding the full issue here --
(a) what visa ?,, Citizenship of which country ?, when did you enter this country?
(b) is your income from US sources ONLY, or a mix of both India and US ? Did you pay any taxes in India on the income that is also being taxed by US ?
Please ant details you provide will help in getting you an answer that is focused to your situation -- yes ?
If you are uncomfortable in putting more herein, you can always PM me ( just no Personally Identifiable Information).
Namaste ji
pk
@Anonymous , ok and based on your this post,
(a) you file your Indian return including/ recognizing all world income from April 1st 2023 through Jan 31st , 2024 -- it is a short year for your income. ( I am assuming that you came here on L visa or H1 visa and your last work/paycheck in India was Jan31st of 2024 )
(b) For US you file ( around April 2025 ) recognizing world income from Feb XX, 2024 through Dec. 31st, 2024.
(c) there may be other smaller issues in my summary above --- see my suggestion for PM ( where you can tell me details that may or may not be of interest to general public ).
(d) also your marital status may be important including any children ( and of which nationality )
Namaste ji
pk
Hi @pk same for me, Oct 2023 travelled to USA through h1. from Apr 2023 to Oct 2023 i received salary in INR and tds also detected from my employer. from nov 2023 to Mar 2024 i got paid by usd the same employer. But in my form 16 employer mentioned gross salary for all 12 months and detected based on that salary. how to file ITR in india. actually i should get returns but there is no refund as per form 16
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