Noida tax lawyer
Noida, a planned city in Uttar Pradesh’s National Capital Region, is home to a concentration of multinational corporations, IT exporters, and entrepreneurs with business ties to the United States. Cross-border tax questions arise routinely: an Indian software company with a Delaware subsidiary, a Noida-based founder relocating to the US on an L-1 visa, or a US citizen with inherited property in Sector 62. Each scenario engages two distinct tax systems—the US Internal Revenue Code and India’s Income Tax Act, 1961—and the US-India Double Taxation Avoidance Agreement that sits between them. Law Offices of SRIS, P.C., a US law firm practicing since 1997, addresses the US-tax side of these matters. For India-tax questions, the firm collaborates with Sowmya R, Of Counsel, who is enrolled with the State Bar Council of Madhya Pradesh (Enrollment No. MP2285/2014) and is not admitted in any US state bar. This page provides general information and does not constitute legal advice for any particular matter.
How US-India Cross-Border Tax Matters Are Structured
Cross-border tax planning between the United States and India turns on the interaction of two national tax codes and the bilateral treaty that allocates taxing rights between them. The US-India Double Taxation Avoidance Agreement (DTAA), in force since 1990, addresses which country may tax specific categories of income—business profits, dividends, interest, royalties, capital gains, and employment income—and provides a mechanism for claiming foreign tax credits to avoid double taxation. A Noida-based business with US-source income, or a US person with India-source income, must navigate both the treaty’s allocation rules and each country’s domestic reporting obligations.
On the US side, the Internal Revenue Code imposes worldwide taxation on US citizens and residents, regardless of where income is earned. This means a US citizen living in Noida generally must file US federal tax returns and may have FBAR (FinCEN Form 114) and FATCA reporting obligations for foreign financial accounts. On the India side, tax residency is determined by physical presence under the Income Tax Act, 1961, and the DTAA’s tie-breaker rules apply when an individual would otherwise be resident in both countries. The two systems use different tax years, different definitions of taxable income, and different compliance deadlines. Coordinating advice across both jurisdictions helps ensure that treaty benefits are properly claimed and that filing obligations in each country are met.
Frequently Asked Questions
What does a Noida tax lawyer handle in a cross-border context?
A Noida tax lawyer advising on cross-border matters addresses the India-tax side of transactions, while a US tax attorney handles the US-tax side under the framework of the US-India DTAA. The India-tax side may involve the Income Tax Act, 1961, the Goods and Services Tax regime, transfer-pricing rules for related-party transactions, and withholding-tax obligations on cross-border payments. The US side may involve Subpart F income rules for controlled foreign corporations, the foreign tax credit under 26 U.S.C. § 901, and information-reporting requirements under FATCA and the Bank Secrecy Act. The two attorneys work within their respective licensure; neither advises on the other country’s law.
How does the US-India Double Taxation Avoidance Agreement work?
The US-India DTAA allocates taxing rights between the two countries for specific categories of income and permits a resident of one country to claim a credit against domestic tax for taxes paid to the other country. For example, business profits of an Indian enterprise are generally taxable only in India unless the enterprise carries on business in the US through a permanent establishment. Dividends paid by a US corporation to an Indian resident may be taxed in the US at a reduced treaty rate. The treaty also contains a non-discrimination article and a mutual agreement procedure for resolving disputes. Treaty benefits are not automatic; a taxpayer must establish eligibility under the limitation-on-benefits article and comply with each country’s procedural requirements for claiming treaty relief.
Do I need both a US tax attorney and an India tax attorney?
When a transaction or tax status involves both US and India law, separate counsel for each jurisdiction is generally necessary because no single attorney is licensed in both countries. A US-admitted attorney advises on the Internal Revenue Code, IRS regulations, and US reporting obligations. An India-admitted attorney advises on the Income Tax Act, GST, and filings with the Indian Income Tax Department. The two counsel coordinate on treaty positions—such as permanent-establishment analysis or residency tie-breaker determinations—but each is responsible only for the law of the jurisdiction where they are admitted. Law Offices of SRIS, P.C. addresses the US-law dimension; the firm’s India Of Counsel addresses the India-law dimension.
What is FATCA and how does it affect Indian taxpayers with US connections?
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, requires foreign financial institutions to report information about financial accounts held by US persons to the IRS. India and the United States entered into an intergovernmental agreement under FATCA, under which Indian financial institutions report US-account-holder information to the Indian government, which then exchanges it with the IRS. For an individual, FATCA may trigger additional IRS reporting if the aggregate value of specified foreign financial assets exceeds the applicable threshold. Separately, US persons with signature authority over or a financial interest in foreign financial accounts may need to file an FBAR if the aggregate account value exceeds $10,000 at any point during the calendar year.
How are foreign assets reported to the IRS by Indian residents who are US persons?
US citizens and lawful permanent residents, regardless of where they reside, must report worldwide income and may need to disclose foreign financial assets on IRS Form 8938 and FinCEN Form 114 (FBAR). The reporting thresholds differ: Form 8938 applies when specified foreign financial assets exceed certain values that vary by filing status and residence, while the FBAR threshold is an aggregate of $10,000 across all foreign financial accounts. Indian financial assets—bank accounts with HDFC or ICICI, demat accounts holding Indian securities, interests in Indian mutual funds, and ownership of Indian private limited companies—may all be reportable. Failure to file can carry civil and criminal penalties under the Internal Revenue Code.
What tax issues arise when an Indian company establishes a US subsidiary?
An Indian parent company forming a US subsidiary triggers US corporate income tax, transfer-pricing rules, and potential withholding obligations on cross-border payments between the related entities. The US subsidiary is a domestic corporation subject to US federal corporate income tax on its worldwide income. Transactions between the Indian parent and the US subsidiary—management fees, royalty payments, intercompany loans—must comply with the arm’s-length standard under 26 U.S.C. § 482 and the corresponding Indian transfer-pricing rules. Dividends paid by the US subsidiary to the Indian parent may be subject to US withholding tax at the treaty rate. The structure also implicates the controlled-foreign-corporation rules on the US side and the place-of-effective-management analysis on the India side.
How does the India-US tax treaty address capital gains?
Under the US-India DTAA, capital gains from the sale of immovable property are generally taxable in the country where the property is located, while gains from the sale of shares may be taxed in the seller’s country of residence subject to specific treaty provisions. Gains from the alienation of shares of a company that derives more than a specified percentage of its value from immovable property in one country may be taxed in that country. The treaty also addresses gains from the sale of partnership interests and movable property forming part of a permanent establishment. The specific treatment depends on the asset class, the holding period, and the taxpayer’s residency status under the treaty’s tie-breaker rules.
Can the IRS and the Indian Income Tax Department share information?
Yes, the United States and India exchange tax information under the exchange-of-information article of the DTAA and the FATCA intergovernmental agreement. The exchange-of-information provision permits the competent authorities of each country to exchange information relevant to the administration of their respective tax laws, including information held by banks and financial institutions. The FATCA intergovernmental agreement provides an additional framework for automatic exchange of financial-account information. Information exchanged is subject to confidentiality protections under the treaty and each country’s domestic law. A taxpayer with filing exposure in both countries should assume that information reported in one jurisdiction may become known to the other.
What is the difference between tax residency and citizenship for US-India tax purposes?
US citizenship alone triggers worldwide US tax filing obligations regardless of residence, while Indian tax residency is determined by physical presence under the Income Tax Act, 1961. A US citizen who lives in Noida for the entire year is generally a US person for tax purposes and must file US returns. That same individual may also qualify as an Indian tax resident under the Income Tax Act’s day-count test. When dual residency arises, the DTAA’s tie-breaker rules—which consider permanent home, center of vital interests, habitual abode, and nationality in sequence—determine treaty residency for purposes of applying the treaty’s substantive provisions. The tie-breaker determination does not eliminate domestic filing obligations in either country.
About Mr. Sris and the Of Counsel Network
Atchuthan Sriskandarajah, Esq. is the principal attorney and founder of Law Offices of SRIS, P.C., a US law firm practicing since 1997. He is admitted to practice law in Virginia, Maryland, the District of Columbia, New Jersey, and New York. Mr. Sris addresses the US-tax and US-regulatory aspects of cross-border matters involving Indian clients and businesses. For India-law matters, the firm works with Sowmya R, Of Counsel, who is enrolled with the State Bar Council of Madhya Pradesh (Enrollment No. MP2285/2014) and 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 are handled by Mr. Sris and the US-admitted attorneys of the firm. The firm has its principal location in Virginia, by appointment only, and holds no location in India.