Bangalore tax lawyer

For individuals and businesses with tax obligations spanning both the United States and India, understanding the applicable rules in each country is essential. Law Offices of SRIS, P.C., a US law firm practicing since 1997, addresses US tax law matters, while collaborating with India-admitted Of Counsel Sowmya R for India-law aspects. Sowmya R is admitted to practice law in India (Enrollment No. MP2285/2014, ). She is not admitted to practice law in the United States. This page provides general information about US-India cross-border tax considerations.

Key US-India Tax Considerations

The United States and India maintain a comprehensive income tax treaty that allocates taxing rights and provides mechanisms to avoid double taxation. For a US citizen or resident living in Bangalore, the treaty may determine which country has primary taxing authority over various types of income, such as employment earnings, business profits, dividends, and capital gains. The treaty also includes provisions for the exchange of information between the two tax authorities, which supports compliance with both US and Indian reporting obligations.

US persons with financial accounts in India must navigate the requirements. requires certain foreign financial institutions to report US account holders to the , while mandates that US persons file Form 114 if the aggregate value of foreign financial accounts exceeds $10,000 at any time during the calendar year. On the Indian side, the governs the taxation of income earned in India, and the applies to the supply of goods and services. The firm’s US-admitted attorneys handle US tax law matters, and Sowmya R, the firm’s India Of Counsel, addresses Indian tax law issues in collaboration with the US team.

Frequently Asked Questions

What is the US-India income tax treaty and how does it affect Bangalore residents?

The US-India income tax treaty is a bilateral agreement that allocates taxing rights between the two countries and provides relief from double taxation. For a US citizen residing in Bangalore, the treaty may reduce or eliminate US tax on certain types of Indian-source income through foreign tax credits or exemptions. It also contains a “saving clause” that preserves the right of each country to tax its own citizens and residents as if the treaty did not exist, subject to specified exceptions. The treaty’s provisions on permanent establishment, business profits, and dependent personal services are particularly relevant for individuals working in India.

Do US citizens living in Bangalore need to file US tax returns?

Yes, US citizens and resident aliens are generally required to file a US federal income tax return regardless of where they live. The United States taxes its citizens on worldwide income. A US citizen residing in Bangalore must report all income, including salary, business income, rental income, and investment gains, on Form 1040. The foreign earned income exclusion, foreign housing exclusion, and foreign tax credit may reduce or eliminate US tax liability, but the filing obligation remains. Failure to file can result in penalties and interest.

What is and when must a US person with an Indian bank account file it?

is a form that must be filed if a US person has a financial interest in or signature authority over foreign financial accounts with an aggregate value exceeding $10,000 at any time during the calendar year. An Indian bank account, including a savings account, fixed deposit, or NRE/NRO account, is a foreign financial account for purposes. The filing is due by April 15, with an automatic extension to October 15. The is filed electronically through the , not with the tax return.

How does affect Indian financial accounts held by US persons?

requires Indian financial institutions to identify and report US account holders to the or face withholding on certain US-source payments. Under the intergovernmental agreement between the US and India, Indian banks and other financial institutions report information on accounts held by US persons to the Indian government, which then exchanges the data with the . US persons with Indian accounts may need to file Form 8938 with their tax return if the value of specified foreign financial assets exceeds the applicable threshold.

Can a US company doing business in Bangalore claim foreign tax credits?

Yes, a US company that pays or accrues income tax to India on its Bangalore operations may be eligible to claim a foreign tax credit against its US tax liability. The credit is generally limited to the US tax on the foreign-source income. The company must determine the source of the income under US rules and calculate the credit on Form 1118. The US-India tax treaty may also provide relief through reduced withholding rates on dividends, interest, and royalties, which can affect the overall tax burden.

What are the Indian tax implications for a US citizen selling property in Bangalore?

A US citizen selling immovable property in Bangalore is subject to Indian capital gains tax under the . The gain is calculated as the sale price less the cost of acquisition and improvement, with indexation benefits available for long-term holdings. The tax rate depends on the holding period and the seller’s residential status. The US citizen must also report the sale on their US tax return and may claim a foreign tax credit for Indian taxes paid. The US-India tax treaty allows the country where the property is located to tax the gain.

How does the firm handle US-India cross-border tax matters?

Law Offices of SRIS, P.C. addresses the US tax law aspects of a matter, while the firm’s India Of Counsel, Sowmya R, handles the Indian tax law aspects. The US-admitted attorneys, led by Mr. Sris, advise on compliance, , , and treaty-based planning. Sowmya R, who is admitted to practice law in India (Enrollment No. MP2285/2014, ) and is not admitted in any US state bar, provides guidance on Indian income tax, , and regulatory requirements. The two sides collaborate as needed while maintaining strict jurisdictional separation.

Is the firm’s India Of Counsel admitted to practice in India?

Yes, Sowmya R is admitted to practice law in India and is enrolled with the (Enrollment No. MP2285/2014). She is not admitted to practice law in the United States. Her role with the firm is limited to matters of Indian law and to serving as a liaison for clients with the firm’s US-admitted attorneys. All US-law aspects of a cross-border tax matter are handled by Mr. Sris and the other US-admitted attorneys at the firm.

What is the difference between US and Indian tax residency rules?

US tax residency is based primarily on citizenship and the substantial presence test, while Indian tax residency depends on physical presence in India during the relevant fiscal year. A US citizen is always a US tax resident regardless of where they live. A non-citizen becomes a US resident if they meet the substantial presence test (generally 183 days over a three-year period). In India, an individual is a resident if they are in India for 182 days or more in the fiscal year, or 60 days or more and 365 days or more in the preceding four years. The rules determine worldwide versus India-only taxation.

Where can I find official information on the US-India tax treaty?

The full text of the US-India income tax treaty is available on the website and on the website of the . The publishes the treaty and related technical explanations at irs.gov, and the Indian government’s tax portal provides the treaty text and any amending protocols. For current withholding rates and competent authority agreements, consult the official sources directly. The treaty is subject to periodic renegotiation, so verify the latest version before relying on it.