As India–US economic ties continue to grow—driven by IT services, global capability centers, startup investments, and remote work—cross-border taxation has become a major area of interest for professionals, investors, NRIs, and multinational companies. While both countries have well-defined tax laws, the India–US Double Taxation Avoidance Agreement (DTAA) creates a framework to avoid double taxation and allocate taxing rights.
This blog breaks down the latest landscape of India–US cross-border tax rules to help you navigate residency, income sourcing, withholding taxes, reporting requirements, and planning opportunities.
Understanding Tax Residency
Taxation depends heavily on residential status in each country.
INDIA
You are a tax resident in India if you meet physical presence tests (182-day rule, 120-day rule for certain high-income NRIs).
US
The US taxes individuals based on:
Result: A person working in the US but spending substantial time in India may be resident in both countries, triggering tie-breaker rules under the DTAA.