Do US Citizens need to pay Tax in India?

Question

Hi,

I am a US citizen, and this year I did some work for a company in India. The work was done over the internet, and I was based in the US. I know I will be paying the taxes in the US; but my question is, do I have to pay taxes in India as well? My understanding is that my income is not taxable in India, but I cannot find any document to corroborate that.

Any help in this matter is appreciated.

Thanks.

Answer 1

Best Answer - Chosen by Voters

Let's put this in normal people terms.

You sat at your computer and did the work. You and your computer were in the US, so this is US-source work. You pay the US.

Realize, that you are responsible for reporting all earnings on schedule C and if you made more than $400, schedule SE as well.

Answer 2

Hi,
I have been working with US clients since 2002 and I never had any such question from anyone.
As long as you are not selling your services in India, you don't have to pay tax in India.

If you start an offshore development centre in India and still don't sell your products in India, you don't have to pay tax in India.
However, when you have an offshore development centre in India, you would have to register for the sales tax and VAT ... those formalities need to be taken care of.

As long as you are in the US, you don't have to pay any tax.

Answer 3

Normally you need not pay tax on your income earned outside India.But as per Section 9(1)(i) of Indian Income Tax, you are liable to pay Tax if you have business connection with Indian company irrespective of your earning outside India.Please check up your connection. and nature of job you do.

Answer 4

Normally no. That really isn't any different than an American company setting up a call center in India to service American customers. The people that work for that company in India do not pay US taxes.

Answer 5

No. You did not earn the money in India, it was earned in the US. You only owe the IRS.