Updated for FY 2025-26 & FY 2026-27 · Form 67 → Form 44
India–US DTAA & Foreign Tax Credit Calculator
Paid tax in one country and worried about being taxed again in the other? Tell us who you are — an NRI cutting Indian TDS, or a resident claiming credit for US tax — and see the exact rate, the saving, and which form you need.
Which describes you?
Pick one — the calculation runs in opposite directions.
DTAA runs in two opposite directions — pick yours first
Almost every confusion about the India–US tax treaty comes from mixing up two completely different situations. If you are an NRI living in the US and India is taxing your Indian income — NRO interest, dividends, royalties — the treaty works by capping the rate India can withhold. If you are a resident of India who earned foreign income and already paid US tax on it, the treaty works the other way: India taxes your global income but gives you a Foreign Tax Credit for the US tax already paid. Same treaty, opposite mechanics — so the tool asks which one you are before it does any maths.
The rule everyone gets wrong: you get the lower of the two rates
For an NRI cutting Indian TDS, the treaty sets a maximumrate — but Section 90(2) of the Income-tax Act says you always get whichever is lower, the treaty rate or India's own domestic rate. That detail flips a lot of published numbers. The treaty caps dividends at 15% for a 10%-plus corporate shareholder and 25% for everyone else; but India's domestic dividend rate for non-residents is 20%, so an ordinary individual investor pays 20%, not 15%. Interest is capped at 15% against a 30% domestic rate, so 15% wins. Capital gains and rental income get no treaty rate cut at all — India taxes them at domestic rates and you relieve the double tax through a US credit instead.
How the foreign tax credit is actually calculated
For a resident claiming relief, the credit is not simply the US tax you paid. Under Rule 128 it is the lowerof (a) the foreign tax paid, converted to rupees at the SBI telegraphic-transfer buying rate, and (b) the Indian tax payable on that same slice of income at your marginal rate. If India's tax on the income is higher than the US tax, you claim the full US tax as credit and top upthe difference in India. If the US tax is higher, you claim credit only up to the Indian tax on that income — the excess US tax isn't refunded by India, but the income is never taxed twice. Crucially, only US federal income tax counts: Social Security and self-employment (SECA) tax, state tax, penalties and interest are all excluded.
The paperwork that makes or breaks the claim
To cut Indian TDS you need a Tax Residency Certificate (TRC) — issued by the IRS as Form 6166 after you file Form 8802 — plus a Form 10F on the Indian income-tax portal, handed to your bank before interest is credited. To claim a foreign tax credit you report the income in Schedule FSI and Schedule TR of your ITR and file Form 67 (renamed Form 44from Tax Year 2026-27 under the Income-tax Act 2025) before your return's due date. Miss the form and the credit can be denied outright — the single most expensive mistake in cross-border filing.
Worked example: ₹10 lakh of NRO interest, US resident
Setup: Arjun lives in California and earns ₹10,00,000 of interest on his NRO fixed deposit in India.
Without the treaty: his bank withholds at the domestic 30% plus 4% cess — ₹3,12,000. With the treaty (after submitting his IRS TRC and Form 10F): Article 11 caps interest at 15%, an all-in rate with no cess on top — ₹1,50,000. He keeps ₹1,62,000more. He then reports this ₹1.5 lakh of Indian tax on his US return (Form 1116) so the income isn't taxed twice.
Now flip it — Arjun moves back and becomes a resident.The next year he does ₹4,30,000 (about $5,000) of freelance work for a US client who withholds $500 of US income tax (₹43,000 at ₹86/$). On a ₹20,00,000 total taxable income (new regime), that top ₹4.3 lakh slice straddles the 15% and 20% bands, so India's tax on it works out to about ₹87,880 (with cess). His FTC is the lower of ₹43,000 and ₹87,880 = ₹43,000, and he tops up the remaining ₹44,880 in India — after filing Form 67 before his ITR due date. Had that $500 been Social Security tax instead of income tax, the credit would be zero.
Frequently asked questions
What is the DTAA tax rate between India and the USA on NRO interest?
Under Article 11 of the India–US treaty, interest is capped at 15% (or 10% if it is interest on a bank/financial-institution loan). NRO deposit interest, which India otherwise taxes at 30% under Section 195, is therefore capped at 15% once you give your bank a Tax Residency Certificate (TRC) and Form 10F. On ₹10 lakh of NRO interest that is ₹1.5 lakh of tax instead of ₹3.12 lakh (30% + cess) — about ₹1.62 lakh saved. The treaty rate is the all-in ceiling, so no surcharge or cess is added on top of it.
Is the India–US dividend DTAA rate really 15%?
Only for a company that owns at least 10% of the voting stock — that's the Article 10(2)(a) rate. For an individual or ordinary portfolio investor it's the 'other cases' rate of 25% under the treaty, but India's domestic dividend rate for non-residents is 20% (Section 115A), and you always get the lower of the two — so an individual NRI pays 20%, not 15%. Many calculators wrongly show a flat 15% for everyone; that is the single most common error in this space and it understates the tax for individual investors.
I freelance for US clients on Upwork — can I claim a foreign tax credit?
Yes, if US income tax was actually withheld on your payment (check your 1099 or the platform's tax summary). Switch the calculator to the 'resident who earned foreign income' side and enter the income and the US tax withheld. The credit is the lower of the US tax paid and the Indian tax on that same income. One trap: US self-employment (SECA) tax does not qualify — only federal income tax does. You must also file Form 67 (Form 44 from Tax Year 2026-27) before your ITR due date.
Is it Form 67 or the new Form 44 now?
It's still Form 67 for everything filed during 2026 — that covers FY 2024-25 and FY 2025-26 returns. Under the new Income-tax Rules 2026 (Income-tax Act 2025), Form 67 is renumbered to Form 44 with effect from Tax Year 2026-27, meaning returns you file in 2027 onwards will use Form 44. The information required is essentially the same: a statement of your foreign income and the foreign tax paid, filed before your ITR due date.
What happens if I miss the Form 67 / Form 44 deadline?
The form must be filed on or before your ITR due date (31 July 2026 for individuals for FY 2025-26) and in any case before the end of the assessment year. There is no separate late-filing window for the form. Some tribunals have treated it as procedural and allowed slightly late filing, but the department can still disallow a late claim — so don't rely on that. File the form before you file the return.
Why does my Indian bank still deduct 30% even though the treaty says 15%?
Because the treaty rate is not applied automatically. Your bank has no way to confirm your US tax residency unless you prove it. To get the reduced rate you must submit a Tax Residency Certificate (TRC) — obtained from the IRS via Form 8802, which issues Form 6166 — together with a Form 10F filed on the Indian income-tax portal. Until both reach the bank, it withholds at the full domestic rate, and you reclaim the excess by filing an Indian income-tax return.
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