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US stocks: You receive $75 on a $100 dividend, but India may tax the full amount again; how to claim relief
Mint 56 min ago·14 Oct 2026, 6:21 pm
When an Indian resident holds shares of a US company that pays a $100 dividend, the US tax authority automatically deducts a 15% (or 30% depending) withholding tax, so the investor receives about $85. Indian tax law treats the same dividend as foreign income, meaning the full $100 is again subject to Indian income tax, creating a potential double tax burden.
To avoid paying tax twice, investors can claim a foreign tax credit on their Indian income‑tax return for the amount already withheld in the US. The credit is limited to the Indian tax payable on that dividend, and supporting documents such as the Form 1042‑S or a dividend statement are required. Keep an eye on filing deadlines, any updates to the India‑US tax treaty, and the need to retain proof of US tax paid, as these factors will determine how much relief can be realized.
Excerpt from Mint
Indian residents earning dividends from US stocks generally receive payouts after US withholding tax. The full dividend is again taxable in India. Here's how to claim relief. Indian investors who hold US stocks can earn dividends, typically drawn from a company's profits or accumulated cash. This periodic payout is…Read the original at Mint
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