Hi, I'm a Resident of India working for MNC. I have RSU as part of my compensation. The Company I work for has it's stock listed in US markets. I have signed w8ben treaty through by trading partner account to avoid double taxation. This year when my RSU stocks vested stocks were sold to cover taxes. ( say I was going to get 100 stocks only 70 stocks were vested and 30 were sold to cover taxes ). Now when I check my form 16 close to the end of the year I see my employer adding this amount as prerequisites. Tax is deducted on this again. There should be a way to avoid this double taxation if I'm not wrong. Can anyone guide me on the process of claiming this tax paid in returns and documents needed for the same ?
Hi,
You can claim foreign tax credit of taxes paid in US by filling form 67 before filing of tax return for that particular year. You also need to claim the tax credit in your tax return.
You will need to provide proof of payment of taxes in US. It can be a tax statement equivalent to form 26AS or any other proof given by your employer
Dear Sir,
Hope you are doing well !!
You can claim the credit of taxes paid in US while filing ITR in India.
As per the tax laws of India, sections 90 and 91 of the Income-tax Act deal with the concept of FTC. Section 90 discusses claiming of FTC in a case where India has entered into a Double Taxation Avoidance Agreement (DTAA) with another country.
Under these sections, if the taxpayer is a resident of India, and he has paid taxes outside India, he can claim a credit of such foreign taxes paid against his tax payable in India.
In accordance with Rule 128, in order to claim FTC, the taxpayer is required to file following documents on or before due date of filing of return:
We may assist you in entire procedure.
Hello,
Generally, there is no double taxation, since US MNCs with employees in India generally submit W-8BEN to US brokers to avoid any withholding related to US taxes.
However, if there double taxation, you can get the credit of foreign tax deducted while filing our income tax return. You will need proof of the payment of foreign tax. US IRS department sends form similar to Form 26AS.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
