I am an NRI and USA citizen. I received house from my father , after his death.I am getting some rental income from this house . D I have to file income tax return or I can show this income in my USA return.Do I need a PAN ? If yes, how to apply?
PLEASE HELP
RAVI RAJ, New York
There is Double Taxation Avoidance Agreement between India and USA. Article 6 of the said agreement is related to earning from immovable property. As per this Article , the country in which the property is situated , may tax the said rental. The said article reads as under
Article 6 - Income from immovable property (real property) - 1. Income derived by a resident of a Contracting State from immovable property (real property), including income from agriculture or forestry, situated in the other Contracting State may be taxed in that other State.
2. The term immovable property shall have the meaning which it has under the law of the Contracting State in which the property in question is situated.
3. The provisions of paragraph 1 shall also apply to income derived from the direct use, letting, or use in any other form of immovable property.
Since the property is situated in India, rental income out of it is taxable in India. For the FY 2009-10 ,the basic exemption is up to RS 1,60,000 . Therefore , if the rental income received by you or accrued to you and any other income arising in India e.g interest exceeds Rs 1,60,000 only in that case , you are supposed to file return in India.
Will there be double taxation?
No , if any tax is paid in India on rental income and that rental income is also taxed in USA , then as per Article 25 of DTA , USA will allow you credit fr the tax paid in India. Read the excerpt of the agreement
Article 25 - Relief from double taxation - 1. In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income
(a) the income-tax paid to India by or on behalf of such citizen or resident ;
How to Get PAN sitting in USA?
Tags: Agriculture, Amp, Article 6, Double Taxation Avoidance, Excerpt, Forestry, Immovable Property, Income Tax Return, India, Nbsp, Nri, Paragraph, Provisions, Rental House, Rs 1, State Property, Usa Citizen, Usa Credit, Usa Return
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