TDS Navigator: India–US
DTAA Calculator
India deducts TDS at 30% by default. As a US-based NRI, you're entitled to significantly lower rates under DTAA. See exactly what you owe — and what you're overpaying.
What’s This Calculator?
FAQs
What is a Tax Residency Certificate (TRC) and is it mandatory?
A TRC is an official certificate issued by the US IRS (as Form 6166) confirming that you are a US tax resident. It proves you are a tax resident of the United States. While not always legally “mandatory,” in practice, you need a TRC (and Form 10F) to claim DTAA benefits and avoid higher TDS deductions.
How do I get TRC as a US-based NRI?
A Tax Residency Certificate is issued by the US IRS as Form 6166. You apply through the IRS website, pay a small fee, and receive the certificate confirming you are a US tax resident. Processing takes 4–6 weeks. (FYI you need a fresh TRC each financial year).
How do I submit my TRC to claim DTAA rates in India?
Once you have your TRC, submit it to your Indian payer — your bank, tenant, or company — along with a filled Form 10F filed on the Indian income tax e-filing portal. Once both documents are on record, the payer is legally required to apply the lower DTAA rate instead of the default rate. Do this before income is remitted, not after.
Can I claim a refund if TDS was deducted at a higher rate without TRC?
Yes. You can file an Income Tax Return in India and claim a refund for the excess TDS deducted. Going forward, submit your TRC to the payer to ensure treaty rates are applied at source.
Does DTAA apply to NRE account interest?
No. NRE account interest is fully exempt from Indian income tax for NRIs under the Income Tax Act itself — so DTAA is irrelevant for NRE accounts. DTAA benefits primarily apply to NRO accounts, Indian stocks, mutual funds, and other India-sourced income.
What is surcharge and how does it affect my TDS?
Surcharge is an additional levy on top of income tax when total income crosses ₹50 lakh. It ranges from 10% to 37% depending on total income. This calculator applies the correct surcharge slab automatically based on all income entered, so your TDS figure reflects the real deduction.
What is the difference between TDS & Income Tax?
When an Indian payer sends you money, they deduct a percentage upfront and deposit it with the government on your behalf. Income tax is your actual final liability, calculated when you file your ITR. If your TDS deducted is higher than your actual tax liability, you get a refund. If it's lower, you pay the difference. If you want a deeper breakdown, read our guide on [TDS for NRIs in the USA](https://www.rupeeflo.com/resources/understanding-the-tds-tax-refund-for-nris).
What is the difference between TDS and Capital Gains Tax?
Capital Gains Tax is the tax on profit from selling an asset — property, stocks, mutual funds. TDS is what gets deducted at the moment of the transaction, before you even receive the proceeds. For NRIs selling property in India, the buyer deducts TDS on the full sale amount, not just the gain. Your actual capital gains tax liability may be much lower — which is why filing an ITR to claim the refund matters.
What is the difference between TDS and Withholding Tax?
They're the same thing, just different names for the same mechanism. The US calls it withholding tax — when your employer deducts federal tax from your paycheck before you receive it. India calls it TDS. Both systems collect tax upfront at the source of income, before it reaches you. When the India–US DTAA mentions "withholding tax," it's talking about the TDS deducted on your Indian income.
Do I still need to report this income in the US?
Yes. As a US tax resident, you must report all global income including Indian income on your US return. However, TDS paid in India qualifies as a Foreign Tax Credit (Form 1116), which reduces your US tax liability dollar-for-dollar. This is how DTAA eliminates double taxation entirely.
Do mutual fund investments in India qualify for DTAA benefits?
Dividends from mutual funds are covered — DTAA reduces the TDS rate on dividend payouts. For redemption proceeds, the applicable treatment depends on whether the gain is classified as short-term or long-term capital gains. DTAA may provide relief, but the specifics vary by fund type and holding period.
What is a Permanent Establishment (PE)?
A PE exists when your business activity in India is significant enough that India claims the right to tax it — a branch, a fixed office, or extended project work. If a PE exists, the DTAA business profits article applies instead of the individual income articles, and treaty rate reductions may not apply to PE-attributable income. Most individual NRIs do not have a PE.
Do I need Form 15CA/15CB even with DTAA benefits?
Yes. Form 15CA and 15CB are remittance compliance forms — they're required any time money is being sent from India to a foreign account, regardless of whether DTAA rates apply. Form 15CB is a certificate from a CA confirming the tax treatment is correct. Form 15CA is then filed online using the details from 15CB. DTAA reduces your TDS rate, but it doesn't eliminate the remittance paperwork.
Can I claim Foreign Tax Credit (FTC) in the US for TDS paid in India?
Yes. TDS paid in India is a creditable foreign tax under US law. You report it on Form 1116 when filing your US return, and it reduces your US tax liability dollar-for-dollar. This is the core of how DTAA eliminates double taxation — you don't get taxed twice on the same income, you get a credit in the US for what India already took.
Sources:
• Income Tax Act, 1961
• India-US Double Taxation Avoidance Agreement (DTAA)
• CBDT Circulars and Notifications
• Finance Act 2024
