How does the US-India tax treaty affect me as an H-1B or green card holder?
The US-India Tax Treaty provides certain protections but does not eliminate the obligation to file US taxes on worldwide income. Key provisions: Article 21 provides relief for students and business apprentices from India on certain types of income. Article 15 covers salaries — generally taxable only in the country where the work is performed. Article 22 covers certain 'other income.' The treaty does not cover capital gains on Indian stocks or real estate owned in India by a US resident, which are taxed in both countries (with a foreign tax credit available to avoid double taxation). Treaty positions must be claimed on your US tax return using Form 8833. Always consult a cross-border CPA to apply treaty provisions correctly to your situation.
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