472. Taxes on Indian Pension in

the United States . . .

Questions: Dear Sir / Madam I am Indian by birth, aged 80. In the month of December 2011 I accepted US Citizenship and got OCI card in January 2012 My wife was getting pension from the Maharashtra State Government till her death in 2002 and thereafter I started getting this as Family Pension, which is taxable, in my pension account in India. I understand regardless of change in nationality I will continue to get this family pension in India from the state government. My question is – Will this Indian Pension income be considered as an item of Global income for US Taxation ? I will appreciate your usual prompt response. Many thanks. With best regards A.B.MAHIMKAR Answer: My understanding is that since you are now a US citizen and probably reside in the United States, your Indian government pension is taxable only in the United States as per Article 19 of the Double Tax Avoidance Agreement (DTAA) between USA and India. As a US citizen, you can take advantage of the DTAA between India and the United States. The DTAA provides relief to their citizens and protects them from paying taxes to two countries on the same income.

Indian Government pension &

Private pensions are dealt

desperately in the Double Tax

Avoidance Agreement

Article 19 and 20 of the DTAA between India and USA deal with taxes to be paid on pension income. Article 19 deals with Government service pensions whereas Article 20 deals with other types of private pensions. Pensions paid by other parties and not the government authorities. Government Pensions: USA residents who earn government pensions from India • Are required to pay taxes in the United States on their Indian pensions if they are resident AND citizens of the United States. • Non US citizens, living in United States and receiving a government pension from India need to pay tax on their Indian pension income only in India. Private Pensions • Private pensions received by US residents from India are taxable only in the United States. This applies even to those who are not US citizens. To clarify, all residents, green card holders or citizens of USA who receive private pensions from India, such pension income is taxable only in USA. You can access the DTAA between India and USA to read more about taxation of pension income at http://www.irs.gov/pub/irs-trty/india.pdf Article 19 and 20 deal with pension income.