Indian ITR refund and 1099 interest income on US return


(Anonymous) #1

Hi Anil, this site is awesome! I love it!

We have an NRO account which pays interest and deducts the tax through TDS. At the year end, the bank sends 1099 which shows the interest income and the tax deducted in dollar amount.

For the past few years we are using it in US tax return and getting foreign tax credit.

Now I found out that I can get refund of TDS by filing tax return in India, because the amount is less than the tax liability limit. Is this true?

If so, I would like to know if you posted any article on how to file ITR ( Indian tax return) for interest income?

If we did file ITR then how do we handle the 1099 interest income and the tax deducted in US return?

I appreciate any input.

(Anil Gupta) #2

If you file for refund, then you cannot claim the foreign tax credit in your US tax return.

So, choose one or other. I recommend that you do not claim for Indian Tax refund if you have already claimed it as foreign tax credit in US.
Also, it is better to keep claiming the Indian TDS in US return as its much easier and smoother process.