Withholding Tax

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Withholding Tax

Dear Indian Instrcutors,

 

India has Double Tax Avoidance Agreement (DTAA) with USA. So if we are paying tax in our own country as a resident individual then the tax should be exempted in other country. This is also clearly mentioned in the official document by Internal Revenue Service (IRS),  Article 25 - Relief from Double Taxation, Paragraph 3(b). 

 

"3. For the purposes of allowing relief from double taxation pursuant to this Article, income shall be deemed to arise as follows:

(b) income derived by a resident of a Contracting State which may not be taxed in the
other Contracting State in accordance with the Convention shall be deemed to arise in the first mentioned State."

 

So I just want to understand, we will be paying 15% to the US government every month and then another 20% to Indian Government while filing Income Tax Return?

 

And, if we are doing so, then the other option of DTAA says that the resident country (INDIA) will also give you rebate of whatever tax you have paid in other country. So in that case, the IRS or Udemy should give us a proper document for the complete fiscal year tax deduction. We can show this to Indian government and claim for Foreign Tax Credit (FTC).

 

Thanks & Regards,

Indian Udemy Instructor

10 Replies

Hi @Tech_Admin, we understand there may be a lot of questions when it comes to tax withholding. We recommend reaching out to the team at instructorsupport@udemy.com with your questions or any other doubts you may have and they will be happy to consult with Udemy's tax team and provide you with the answers you need!

Respected Maria Madam,

Thanks for your response. I will surely write to instructorsupport@udemy.com, why I have mentioned this query in the community so that I can get replies from existing Indian instructors. I wanted to know, how they have solved their issues. 

 

Regards

 

Hi @Tech_Admin ,

 

Have you got the reply?

 

 

Hi @VigneshRK what's your rate of withholding tax?

I have filled 15% as I'm from India @Tech_Admin 

So overall for every Indian instructors, the rate of withholding tax is 15%. Do you know anyone from India whose withholding tax is 0%?  

@Tech_Admin NO, even I'm looking for the same

Hello, Did you get any resolution or it is still 15%?

Please talk to any CA, we are paying taxes in two places. India as well as the USA.

Whatever revenue we receive is after the deduction of taxes.

Expecting responses from other Indian Instructors.

 

 

@Tech_Admin I'll recommend you to send an email to instructorsupport@udemy.com since this is a level account question, only the support team will guide you.

 

Eliana Cerna

Udemy Community Moderator 

@MariaG @Tech_Admin @VigneshRK , Hello friends, I am CA Abhishek Jain. I have seen most of the Indian instructors facing this same problem. Please note,  that the document is form 1042-S which you can easily download from the udemy portal. with that document, you can claim US Withholding Tax as FTC (foriegn tax credit) in india.  But the process of claiming FTC is not as easy as it seems. you will need senior CA who is already filing such kind of returns. Most of the CA are unaware of this FTC and the procedure of claiming it in indian ITR.  For last year (FY 22-23) 31. Dec. 23 is the last date. so if you have not claimed the same, i advice you to do it very fast else you will loose the FTC forever.

 

I am already filed the this kind of returns and claimed full FTC in indian ITR since more than 4 years. If you need any assistance w.r.t this, i will be very happy to help you out. 

 

Thanks

CA Abhishek Jain

caabhisheksjain@gmail.com

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