US Dual status alien - Treaty Resident

[Ronrohit]

Hi

I am an Indian citizen who moved to US in Nov 2023 along with spouse/child and permanent home from 1st day in US. My sources of income in Nov-Dec are both in India and US.

I am filling my US 2023 return as dual status alien (Jan-Oct - Non resident, Nov-Dec -Resident). I am using first year of choice rule after meeting substantial presence test in 2024. I wanted to check as per US-India tax treaty do I qualify as US treaty resident or not for Nov and Dec 2023. If not what is the reason for that. For Nov-Dec US income, do I need to pay tax in India after considering FTC or can I take Nov-Dec US income as tax exempt income while filing India tax return 

[DaveF1006]

According to the IRS, you may choose to be a  resident under the first-year choice in the following circumstances.

1. Be present in the United States for at least 31 days in a row in the current year, and
2. Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of the current year. (For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.)

You qualify as a US resident if you satisfy these two requirements. For Nov/Dec income, you will need to file a tax return in India, pay the tax, and declare a foreign tax credit for taxes assessed in the Nov/Dec timeframe.