Q.884 Pension income tax under

DTAA in USA and India

Dear sir, I am 82 years old of indian origen I became usa resident ( Green Card Holder ) last year I am a pensioner of Govt of india I also get the family pension after the death of my wife who was a government pensioner My question is that can i pay my income tax in usa as green card holder as per usa income tax laws on my global income. I have no other income other than my (1) personal pension (2) Family pension due to me after the death of my wife An early response is requested S N BAMBROO Answer: Under the USA/India Double Tax Avoidance Agreement (DTAA) there are two provisions for taxing pension income. One deals with pensions received from government sources [Article 19] and the other [Article 20] spells out taxation rules about private pensions. As the pension you receive is a government pension, article 19 would apply to you. This article basically states that if a US resident earns Government pension from India, his pension is taxable in the United States only, if he is a resident of AND a citizen of the United States. Hence if a US resident is not a citizen of the US, then regardless of whether such a person is a green card holder or not, his/her pension income from the Indian government will be taxable ONLY in India. In your case, as you state you are a green card holder and hence not a US citizen, your pension is taxable only in India. Excerpt below from DTAA: ARTICLE 19: Remuneration and Pensions in Respect of Government Service. 1. (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. (b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services. 2. (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that state or subdivision or authority shall be taxable only in that State. (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. Information on taxation of pensions received in India or USA has already been answered in question number 472 Taxes on Indian Pension in the United States . . . Under DTAA Agreement. I hope you find the information provided here useful. Thank you for visiting NriInformation.com