New Delhi tax lawyer
Cross-border tax matters involving the United States and India present distinct legal questions that span two sovereign tax systems. A New Delhi tax lawyer typically handles matters arising under Indian tax law—including the , goods and services tax (GST) obligations, and representation before Indian tax authorities. When a matter also involves US tax obligations, a US-admitted attorney addresses the American side of the equation. Individuals and businesses with connections to both countries—non-resident Indians with US income, US citizens holding assets in India, or companies operating across both jurisdictions—may need guidance on how the two tax regimes interact. The provides a framework for resolving many cross-border tax questions, though its application depends on the specific facts of each situation.
How Cross-Border Tax Matters Between the US and India Are Structured
Tax obligations in the United States and India operate on different foundational principles. The United States taxes its citizens and lawful permanent residents on worldwide income regardless of where they reside, while India generally taxes residents on worldwide income and non-residents only on India-source income. A person may be considered a tax resident of both countries under each country’s respective rules, triggering the need to apply the treaty’s tie-breaker provisions. addresses double taxation through a combination of exemption and credit mechanisms. The treaty covers taxes on income including federal income tax in the United States and income tax and surcharge in India, and it establishes reduced withholding rates for dividends, interest, and royalties paid between the two countries.
For a US person with India-sourced income—such as rental income from property in New Delhi, dividends from an Indian company, or capital gains from the sale of Indian assets—the US requires reporting of that income on the US return, with a foreign tax credit generally available for Indian taxes paid. For an Indian resident receiving US-sourced income, Indian tax law may impose tax on that income with credit for US taxes paid, subject to the treaty’s provisions. The imposes additional reporting obligations on US persons with foreign financial accounts, and Indian financial institutions are required under an intergovernmental agreement to report account information for US account holders to Indian tax authorities, who then exchange that information with the . The Report of Foreign Bank and Financial Accounts (FBAR), , is a separate US filing requirement for US persons with an aggregate value exceeding $10,000 in foreign financial accounts at any point during the calendar year.
Frequently Asked Questions
What does a New Delhi tax lawyer handle?
A New Delhi tax lawyer handles matters arising under Indian tax law, including income tax, GST, and representation before Indian tax authorities. This encompasses advising on the , filing appeals before the , representing clients before the , and addressing tax disputes with the Indian revenue authorities. A New Delhi tax lawyer may also assist with tax planning for Indian residents, non-resident Indians, and foreign companies operating in India. For matters that involve US tax obligations—such as a US citizen’s Indian income or an Indian resident’s US investments—the Indian tax lawyer typically collaborates with a US-admitted attorney to ensure both countries’ requirements are addressed.
Do I need both a US and an India tax attorney?
When a matter involves tax obligations in both the United States and India, separate counsel admitted in each jurisdiction is generally necessary because no single attorney is licensed to practice law in both countries. A US-admitted attorney handles US tax compliance, correspondence, and US tax planning, while an India-admitted attorney addresses Indian tax filings, representation before Indian authorities, and Indian tax strategy. The two attorneys collaborate on treaty analysis and coordinate filings to avoid double taxation, but each is responsible only for the law of the jurisdiction where they are admitted. This division of responsibility is required by the bar rules of both countries and ensures that each aspect of the matter receives attention from counsel qualified in the relevant legal system.
How does the US-India tax treaty affect cross-border income?
reduces or eliminates double taxation on income that would otherwise be taxed by both countries through a combination of exemption, credit, and reduced withholding rate provisions. Under the treaty, dividends paid by a company resident in one country to a resident of the other may qualify for a reduced withholding rate. Interest and royalties likewise benefit from treaty-rate ceilings. The treaty also contains a tie-breaker provision for individuals who would be considered tax residents of both countries under each country’s domestic law, assigning residence to one country based on factors including permanent home, center of vital interests, and habitual abode. The treaty’s exchange-of-information article facilitates cooperation between the and Indian tax authorities.
What is the difference between US and Indian tax residency rules?
US tax residency is based primarily on citizenship and lawful permanent resident status, while Indian tax residency is determined by physical presence in India during the relevant fiscal year. A US citizen is subject to US tax on worldwide income regardless of where they live. An individual who is not a US citizen or lawful permanent resident may be a US tax resident under the substantial presence test. Under Indian law, an individual is a resident of India if they are present in India for 182 days or more during the fiscal year, or 60 days or more during the fiscal year and 365 days or more during the preceding four fiscal years. A person who qualifies as a resident under either country’s rules may need to apply the treaty tie-breaker to determine which country has primary taxing rights.
How does FATCA affect Indian bank account holders?
requires Indian financial institutions to identify and report US account holders to Indian tax authorities, who then exchange that information with the under an intergovernmental agreement between the two countries. A US person holding an account with an Indian bank, including NRO and NRE accounts, may be subject to FATCA reporting. The Indian financial institution will typically request a Form W-9 or other documentation to determine the account holder’s US status. Failure to comply with FATCA reporting can result in withholding on US-source payments to the financial institution. For the individual US account holder, the primary obligation is to report the account on the FBAR () and on Form 8938 with the US tax return if the aggregate value of specified foreign financial assets exceeds the applicable threshold.
What should US citizens with India income know about filing obligations?
US citizens must report worldwide income on their US tax return, including India-sourced income such as rental income, dividends, interest, and capital gains, with a foreign tax credit generally available for Indian taxes paid on that income. The US-India DTAA may reduce Indian withholding tax on certain types of income, but the US citizen must still report the gross amount on the US return. Foreign tax credits are claimed on Form 1116 and are subject to limitations based on the type of income and the US tax rate applicable to that income. Additionally, US citizens with signature authority over or a financial interest in Indian financial accounts may need to file the FBAR and Form 8938. Indian tax paid on India-sourced income should be documented with Indian tax receipts or certificates for credit-claim purposes.
How are foreign assets reported under Indian tax law?
Indian residents are required to report foreign assets, including financial accounts, immovable property, and beneficial interests in foreign entities, on their Indian income tax return using Schedule FA. The reporting requirement applies to individuals who are residents of India for tax purposes and hold specified foreign assets at any time during the relevant accounting period. Non-residents are generally not required to report foreign assets on an Indian return, though they must report India-sourced income. The imposes penalties for non-disclosure of foreign assets. Indian residents with US assets should also consider whether US estate tax exposure exists for US-situs property.
Can a US tax attorney assist with Indian tax disputes?
A US tax attorney is not licensed to practice Indian law and cannot represent a client before Indian tax authorities or Indian tribunals. Indian tax disputes—including assessment proceedings, appeals before the , and matters before the —require representation by an India-admitted advocate or chartered accountant authorized to practice before those bodies. A US tax attorney may, however, assist with the US tax implications of an Indian tax dispute, such as claiming a foreign tax credit for Indian taxes paid, addressing questions about Indian-source income, or analyzing how the resolution of an Indian tax matter affects US tax reporting. For the Indian side of the dispute, the client engages India-admitted counsel directly.
About Mr. Sris and the Of Counsel Network
Mr. Sris, who founded Law Offices of SRIS, P.C. in 1997, is a former prosecutor admitted to practice in Virginia, Maryland, the District of Columbia, New Jersey, and New York. He serves as the responsible US attorney for the firm’s cross-border practice. For India-law matters, the firm works with Sowmya R, Of Counsel, enrolled with the (Enrollment No. MP2285/2014). She is not admitted in any US state bar. Her role is limited to India-law matters in collaboration with the US-admitted attorneys of the firm. All US-law aspects of a cross-border tax matter are handled by Mr. Sris and the US-admitted attorneys of the firm. The firm maintains its principal location in Virginia, by appointment only, and holds no location in India.