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Tax question for NRE investment in India. (we are USA residents.)

Discussion in 'General Discussions - USA & Canada' started by Bindu09, Jan 18, 2012.

  1. Bindu09

    Bindu09 New IL'ite

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    I have a flat in India which i bought with a NRI loan from ICICI. I have declared this property in my US taxes, now coming to the rent I started receiving last year, do I need to show it in my US taxes or India taxes?

    I'm guessing US as it's NRI property? Please let me know what is the correct thing to do.:spin
     
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  2. Shanvy

    Shanvy IL Hall of Fame

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    rental income is income in india even if it is bought as an nre.
     
  3. mridusudha

    mridusudha Silver IL'ite

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    If you are a US Resident then you should report your worldwide income. So you should report the rental income from India.

    Hope this helps!
     
  4. Pranjjal

    Pranjjal Gold IL'ite

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    Whatever income u earn in India is taxable even if you r NRI I mean Rental income (One self-occupied House Property or part of such property owned by an individual and used for personal use, but not let out, in the previous year, will not be taxable). ,savings interest(except NRE,FCNR account),long term or short term capital gain,Profits or gains of business or profession,the income earn on bonds,stocks in India all these are subject to taxable In India. If any of this income in total(ur Rental income included) not beyond the base slab for the financial year 2011-2012 i.e 0-1,80,000 Rs for General tax payer which is no tax then you don't need to pay tax in India. But if it is beyond that then u need to file the income tax in India. And about USA mostly people don't declare Indian rental income here.
     
    Last edited: Jan 21, 2012
    1 person likes this.
  5. anafinconsultin

    anafinconsultin New IL'ite

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    If you are a US Citizen/Permanent Resident you need to declare your worldwide income irrespective of where it was earned. If you are a Indian Citizen staying in US (US Resident for tax purposes) you still need to declare your worldwide income in your US return.
    Similarly as per Indian Tax Laws you will need to declare the income earned in India on your Indian tax return.

    Declaration does not meen that you need to pay double taxes. If you have declared your income in India Tax Return and paid taxes in India, you will qualify for claiming Foreign Tax Credit for the taxes paid in India when you declare it in your US Tax Return. This will avoid dual taxation.

    This document may help you understand the relevant tax laws better
    http://finsai.com/docs/tax/USIncomeTaxesNonResidents.pdf

    Get in touch for any queries
    Shilpa
     
  6. Bindu09

    Bindu09 New IL'ite

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    Shilpa,
    Thanks a bunch. This is perfect and what I was looking for. Little late in response, but thanks a lot.
     

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