Unlike India, the US tax law is based on residency as well as citizenship. That is, the US taxes both, its residents and citizens on their global income irrespective of where they live. Resident in this case is defined as either a green card holder or someone who is physically present in the US for a certain number of days in the year. India on the other hand, taxes only its residents on global income. That is, Indian citizens who do not live in India are taxed in India only on their India income and not their global income.
This basic difference poses several challenges for US Green Card holders. If you are a Green Card holder living in India, you would qualify as a resident in India and therefore will have to pay taxes and file returns in India on your global income. However, as a Green Card holder, you are obligated to file your tax returns in the US and declare your global income there. So if you are a resident of India and earn a pension in India, you would be taxed in India and you would also need to show this pension income in the US tax return. This income will be taxed in the US as per tax rates in the US, which could be more or less than what you are charged in India. Having said that, you will get relief under the Double Taxation Avoidance Agreement (DTAA) between India and the US. That means, if you have paid taxes in India on a particular income, you will get a credit tax that extent in the US. However, you will still have to file your US tax returns.
Moreover, if certain incomes are tax-free in India, such as dividends or interest on provident funds, they will be taxed in the US.
"Green Card holders who are living outside of USA and have 'earned income' will be able to avail of the earned income exclusion of up to $95100 in 2012. Earned income here would include salary, commissions and self employed income. Pensions and annuities, capital gains, rental income, interest and dividends are not considered as earned income," Vargis adds.
Unlike India, the US tax law is based on residency as well as citizenship. That is, the US taxes both, its residents and citizens on their global income irrespective of where they live. Resident in this case is defined as either a green card holder or someone who is physically present in the US for a certain number of days in the year. India on the other hand, taxes only its residents on global income. That is, Indian citizens who do not live in India are taxed in India only on their India income and not their global income.
This basic difference poses several challenges for US Green Card holders. If you are a Green Card holder living in India, you would qualify as a resident in India and therefore will have to pay taxes and file returns in India on your global income. However, as a Green Card holder, you are obligated to file your tax returns in the US and declare your global income there. So if you are a resident of India and earn a pension in India, you would be taxed in India and you would also need to show this pension income in the US tax return. This income will be taxed in the US as per tax rates in the US, which could be more or less than what you are charged in India. Having said that, you will get relief under the Double Taxation Avoidance Agreement (DTAA) between India and the US. That means, if you have paid taxes in India on a particular income, you will get a credit tax that extent in the US. However, you will still have to file your US tax returns.
Moreover, if certain incomes are tax-free in India, such as dividends or interest on provident funds, they will be taxed in the US.
"Green Card holders who are living outside of USA and have 'earned income' will be able to avail of the earned income exclusion of up to $95100 in 2012. Earned income here would include salary, commissions and self employed income. Pensions and annuities, capital gains, rental income, interest and dividends are not considered as earned income," Vargis adds.
4thaugust1932 what's your point anyway? what are you trying to say? we know how taxes work in US for non citizens(been there). are you proposing to go from US to India to save some money on taxes? fuck that..
4thaugust1932 what's your point anyway? what are you trying to say? we know how taxes work in US for non citizens(been there). are you proposing to go from US to India to save some money on taxes? fuck that..
if you are very ambitious, you go back and never look back. you give up the green card. it is still possible to get a tourist visa.
