Indian Investors Face Double Taxation On US Stock Dividends And Relief Process

Indian residents earning dividends from US stocks typically receive payouts after the United States withholds a flat 25% tax at source. Despite this foreign tax deduction, the full dividend amount remains fully taxable in India according to the investor's applicable income-tax slab rate under old or new tax regimes.

To avoid double taxation, Indian tax laws permit investors to claim a foreign tax credit. Taxpayers must report the full dividend income in their Indian income tax return and file Form 44 with supporting documents to claim credit for taxes already paid in the US.

Editor's note: States to file 'Form 44', whereas the source explicitly notes it is 'Form 44 (erstwhile Form 67)'.