I have one question which is still unanswered. Questions is:
I am a US Resident person on H1B. I pay my taxes in US every year. I did not have any income from NRO account FD interest so far in India. I have invested in NRO FD this year. Let’s say I have 2.5 lakh income from NRO FD Interest in India. This is my only income in India. NRO account bank deducted 30% on the interest (i.e. 2,50000 * 30% = INR 75,000). I will file a return in India to get a refund of INR 75,000 back as I fall in free income tax slab (INR 0 to 2.5 lakh).
In US, my understanding is, I will convert 2.5lakh into dollars 250000/65 = $3846 and show it as income in US tax returns.
Confusion here is: If we follow the above, which one of A or B is true?
A. Will I still get 30% tax credit in US tax returns as I have paid 30% TDS on my income in India. This is an another thing, that I got refund as I did not fall in taxable bracket in India?
B. I cannot get 30% tax credit in US as I have got a refund in India?
Do you know or could you please let me know?