r2i forum

Hi
I have a question regarding dual taxation. Please pardon if this has been already answered. I have all the specific details for my situation so I can get an exact resolution.
I was in USA for several years on H-1B. Then in Dec 2009 I moved back to India and from Feb 2010, I have been working for a US based company as a consultant. The company has been paying based on my invoices and is going to issue me 1099 for 2010. They are also not deducting the taxes on source.
Now I would like to know, once I get 1099, do i file 1040 and also since I am working from India, am i supposed to file indian taxes too. I do have interest income in india above the minimum deduction and hence would be filing taxes in india anyway to get back some of the TDS deducted from the interest.

Thanks in advance.
KD

Hi KD,

There are implications on taxes for Income on 1099 from both US and Indian point of view.
US : You need to file the US tax returns as a non resident, ( assuming you neither a USC or GC Holder) you need to report the income per 1099 on the return and pay the taxes. In addition to taxes you also need to pay the social security and medicare @ 15.30 % since this will be your self employment income.

India: Since you are providing the services from staying here in India and using the resources from India, the income will be deemed to accrue and arise in India and will be taxable in India too. Though you will be eligible for credit on the taxes paid to the IRS. If your income on 1099 exceeds INR 10.00 Lacs or more then you also need to maintain the books of accounts and get these audited from a practising Chartered Accountant.

We assist in both US as well as India tax filing and having providing services in this domain since 2006. Contact us with more information on [email protected]

Regards,
kkassociate

Hi
Since I am in RNOR status, would i still have to report my US income on the Indian tax filing. In US I have only income on 1099 & in india only income is from interest. If I had to use a software/online service which one would be recommended.
Another concern that i have is lets say that I have to file in India, Pay GOI taxes and then get credit in US, how would I do that since I can't file my Indian taxes till April-May 2011 & US taxes are due 15April 2011.
I would appreciate any help on making the things clear for me.
thanks