Taxes 101 for US based Non Resident Indians (NRIs)


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?

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.