Q622. Tax on US Citizens retired in India . . . Taxes in India on US social security and

Question: Dear Mr. Chand, Thank you for doing such a wonderful job. The questions on Taxation are generally what a person has to do with the requirements of the USA IRS. But something of even greater concern seems to be unaddressed. I am advised that US Citizens retired in India will have to pay taxes to the Indian Government on USA Retirement Income, Social Security and even withdrawals from a ROTH IRA. If that is so, then it completely changes the equation of retiring in India and living off Social Security. Kind Regards Meera

Answer: My understanding is that previous residents of USA now retired, living in India and receiving social security benefits or public pensions from the United States, by virtue of Article 20(2) of the Double Tax Avoidance Agreement are required to pay tax on such income only in the United States. US social security income and public pensions are not liable to tax in India. Even though both India and USA tax their residents on their worldwide income. The Double Tax Avoidance Agreements (DTAA) between two countries are signed so that citizens of either country do not have to pay tax twice on the same income. Not sure who has advised you that US social security is taxed in India, perhaps you should check with a professional accountant to reconfirm.

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RI

Taxes on Indian Pension in the United States . . . Pension received from India not taxable in Canada . . . Seniors Think Twice before moving abroad! . . .