As a non-resident Indian (NRI) with U.S. citizenship, dealing with Tax Deducted at Source (TDS) on capital gains and dividends earned in India requires a specific approach. Since you're encountering issues with the Income Tax Return (ITR) forms, particularly with the schedules TR (Tax Relief) and FSI (Foreign Source Income), let's clarify the process:
Choosing the Right ITR Form: For your situation, where your income sources in India are capital gains and dividends, you should file using the ITR-2 form. This form is designed for individuals who do not have income from a business or profession but have capital gains or income from more than one house property.
Understanding Schedules TR and FSI: The TR and FSI schedules in the ITR forms are geared towards residents with foreign income and tax relief under Double Taxation Avoidance Agreements (DTAAs). Since you're a non-resident with income sources in India, these schedules are not applicable to your situation.
Schedule TR is used to claim relief under a DTAA if you have paid tax in another country (in your case, the U.S.). As an NRI, this schedule isn't relevant unless you have income in India that is also taxed in the U.S.
Schedule FSI is for disclosing income that a resident earns from outside India. As an NRI, your foreign income (in the U.S.) is not taxable in India, so this schedule is not applicable.
Filing the ITR-2 Form: When filing the ITR-2, you should focus on the relevant sections for capital gains and dividend income. Ensure that you disclose all such incomes correctly. Since TDS might have been deducted on these incomes, you need to report these details accurately to claim a refund, if applicable.
Claiming TDS Refund: If excess TDS has been deducted on your income in India, you can claim a refund of the same. This is done by filing the ITR with accurate income and TDS details. After processing your return, if it's found that more tax has been deducted than your actual tax liability, the excess amount will be refunded to you.
Remember, the key is to fill out the ITR form accurately with your income details and TDS information. Schedules TR and FSI, which are automatically selected in the online ITR filing system, can be left blank if they are not applicable to your situation.
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