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W-8ben india tax treaty Form: What You Should Know

If an Indian citizen, such as a Form W-8BEN is not given at U.S. Border, please visit In Part II, Line 11, the last 8 digits of the Indian passport number should be entered. Otherwise, it will be considered as not valid. As soon as a Form W-8BEN is generated from the U.S. Department of Treasury (Treasury) it can be given to the payment settlement entity  which will then use it to verify a foreign individual's information, including that it is an individual, or whether you  are an individual. It will be used only for the purposes of IRS's Foreign Account Tax Compliance Act (FATWA) Compliance and is not part of the Foreign Financial Information (FFI) or Foreign Bank Account Report (FAR).  Form W-8BEN is a requirement for individuals who have foreign bank accounts, including: a. American citizens who are U.S. residents; b. American citizens living abroad who are U.S. residents and are not U.S. citizens living abroad; c. American-resident corporations which were organized (in whole or in substantial part) in a foreign country; d. Corporate entities that are registered under the laws of more than one foreign country including any  foreign bank which serves as a correspondent account or a branch of a foreign bank located outside the U.S.). Form W-8BEN is a requirement for: a. United States citizens who are U.S. residents; b. U.S. citizens living abroad who are U.S. residents and are not U.S. citizens living abroad; c. American corporates which were organized (in whole or in substantial part) in a foreign country; d. Individuals who are citizens or U.S. nationals not residing or being maintained in the U.S.

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FAQ - W-8ben india tax treaty

Should non-resident aliens in the US claim tax treaty benefits on W-8BEN if they are working in India and the RSU's vested in the US?
Not the way you phrased the question. A nonresident alien is, by name, not resident in the US. Therefore, "...nonresident aliens in the US..." is a physical impossibility. I think what you may have meant to say is "...nonresident aliens claim tax benefits..." If that is indeed what you meant, then yes, you benefit from a treaty rate on the dividends. The capital gains are already US tax-free without the need for the treaty. You will need an ITIN to gain these benefits. Without an ITIN, they may end up taxing the dividends and the capital gains at 30%.
Do I have to pay tax as a student in Canada when working online?
This is actually a surprisingly difficult question.First you should determine whether you have the legal right to undertake this work while in Canada. It’s not just the time of work, it may be the type of work. I know that’s not part of your question, but this question arises before you talk about tax.You don’t need to worry about paying US tax, because you’re not physically working there. However, you may get a request from Upwork for form W-8BEN. You may have to get an US ITIN to complete it. This form basically authorizes them not to withhold any US tax.ResidencyAs for Canadian tax, step one is to determine whether you’re a resident for tax purposes. This is not the same as being a resident for immigration or health insurance purposes. Canada has residency rules, your country of origin has residency rules, and there are treaty rules that usually override those two.Typically, students who are financially dependent upon their parents will remain resident in their parents‣ country. I’m going to assume you’re a resident of that other country (can I guess India?), and not Canada.Source of incomeWhat you’re earning is likely to be considered business income, rather than employment income (call it an educated guess).Under domestic law, Canada taxes business income earned by a nonresident. If you provide the services here, you’re taxable here.Permanent establishmentThe India-Canada tax treaty limits Canadian taxation to situations where:You have a fixed base in Canada. This is something like an office where you control the space. If you are doing the work in a home you own or have rented, you probably meet this test;You are physically present in Canada 183 days or more during the year (if you’re in school, you will probably meet this test), orYour remuneration is borne (essentially “paid”) by Canadians or businesses in Canada. This probably is not true.So yes, even as a nonresident, you’re probably taxable in Canada on this income.******** This is not professional advice. Don’t sue me, etc. ************
I currently work in the US. If I go back to India and then withdraw my 401k and sell a few stocks, will I have to pay only the federal tax?
You should contact a tax adviser however I believe that you will pay federal tax and state tax if you lived in a state that requires it. The Administrator of your 401k is required to withhold 30% unless the beneficial owner furnishes a Form W-8BEN withholding certificate and your Country has a tax treaty in effect with the United States.
Does an Indian living in India, who certified W-8BEN, have to pay US taxes on dividends earned from Nasdaq-listed stocks if that was the only US related business transaction?
No. Following types of income are not subject to foreign-person withholding at a rate of 30% under section 1441:Broker proceedsShort Term OID (original issue discount)Bank deposit interestforeign source interestNasdaq listed stocks will likely fall under “broker proceeds” and is exempt.However, your tax information will be shared with Indian tax authorities (under IGA model 1 treaty) and can be subject to taxes in India.
I am an Indian citizen and living in India, but I'm employed by a US company working remotely from India, earning a salary in USD. What should I know about filing a tax return in India?
So even if you are employed by an US company, for the purpose of income tax laws, you are an Indian resident, your global income is taxable in India. To say it in simple terms, it is no different then you being employed by an Indian Company. In case your total income before deduction is above 2.5 lacs, you are required to file an income tax return. The due date for the current year is extended till 31st August otherwise it is normally 31st July of the following year of the financial year. Moreover since the tax might have been deducted by the US company from your salary, you may get a credit for such tax paid by your US employer against your Indian income tax liability. As far as Indian tax liability is concerned, you have  to discharge this by way of advance tax in case the credit available in respect of tax deducted by your US employer is not sufficient. In case you have not been able to pay your advance tax, the same can be paid by way of self assessment tax. For delay or default in payment of advance tax, read the below article written by me.What if you have failed to pay advance tax? You can avail other tax deduction under Section 80 C, 80 D, 80 E in case you have taken education loan etc. In case you want to need clarification on any specific issue, please ask specific question as the area of income tax very wide and one is not able to under stand it fully even one reaches grave.
I am an Indian citizen working in india, received stock options from US company. I filed W-8BEN but still tax was deducted on vesting of stocks. Is this correct? Again I have to pay indian income tax on selling the shares. Please advice?
With respect to stock options issued, because you are a resident in India and are also receiving the options in India,  a benefit is arising to you in India being the difference between the Fair Market Value (FMV) on the date on which the option is exercised less the any amount being actually paid or recovered from you. This benefit would be subject to tax as part of 'salary income' being in the nature of a 'perquisite' provided by the employer and tax will be deducted by the employer in India (though they are stock options of the US Company). In the event of sale/transfer of shares, the transaction takes the course of you selling your property. Hence, the difference between the sales consideration of your stocks and the fair market value on the date of exercise would be treated as capital gains and subject to capital gains tax. The capital gains could be long term or short term, depending upon the period of holding of such shares/securities.Hope the above clarified. Regards, CA Aditi Bhardwajaditi.bhardwaj@outlook.com
Form W-8BEN, what type of form is this in the US?
A W-8 is just a W-9 for foreign contractors. It mostly just tells the IRS that you don’t owe any taxes because you’re foreign.To start: a W2 is what a boss of an employee gives the employee so he can file his taxes. One copy goes to the IRS and the other goes to the employee. When you get hired, you fill out a W4 that tells your employer the information necessary to fill out the W2!A 1099 is the same thing, but for non-employees who are paid to do things. A W9 is the corresponding/“opposite” of a 1099—the equivalent of a W4 for contractors. That is, if you’re a contractor, you give your “boss” a W9 that says your name and social security number so they have the information to give you a 1099 at the beginning of the year so you can do your taxes. That basically goes for any sole proprietor (or law firm) where more than $600 changes hands. So if you pay someone $800 to fix your car, you should give himNow, you’re question. If you are a contractor and not in the US (like a programmer in India for a US business), you don’t do W9s, you do W8s. Your boss doesn’t give you a 1099 at this point, but he does need the W8 on file to prove your status to the IRS, so they don’t send cops after you looking for tax money, or they don’t ask him to garnish your future wages.There are multiple types of W8s, depending on what’s going on. They ask whether the foreign bank account that’s being paid is really controlled by a US Citizen, whether the foreign company is really a subsidiary of a US company who’s taking all the money, whether there are treaties involved between the US and the country where you’re doing the work, etc. It’s a mess, and that defines whether you fill out a W8-BEN or a W8-BEN-E or W8-ECI. (Note, BEN there stands for “beneficiary,” because again that’s the main question.)Of course I am not a lawyer or a CPA (but I do consider myself qualified to answer the question.) Nevertheless, you may want to consult with someone officially qualified before acting on my advice. I write so you can understand, of course any question “correct” enough to be actionable involves words and concepts that you probably googled before getting here. We’re all cogs in the machine of mutual edification.
If NRI & NonResident of USA too earn money in USA and signed W-8BEN. do I have to pay taxes in India if I bring money to India for family maintenance?
I also have the same question. However, I do not think so.It is because India govt. only tax based on the income earned in India. Not on the Income earned world wide iff you are already showing them on foreign tax return.Even if you are NRI & NonResident, you need to file 1040NR(NR for NonResident) and other required tax forms.You may get Standard deduction, if you are a student. But you need to mention that on Line L on form 1040NR.The above was related to normal salary. If you are talking about the interest earned through Bank accounts, they are non taxable, however, you need to mention that too on Line L on 1040NR.Read: India US Tax Treaty Article 21(for students). IRS LinkIf you have no income, you have to file form 8843.
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