# India–US Tax Treaty Planning

> The India–US tax treaty limits how much each country can tax the same income. Indian residents give US payers Form W-8BEN to get treaty withholding rates — dividends 25% (15% for 10%+ corporate holders), interest 15% (10% for bank loans), royalties and fees for included services 10–15% — and claim credit for that US tax in India. The treaty's tie-breaker rules decide residency for people treated as resident by both countries.

Practice: US Tax Services — https://www.industax.com/services/us-tax/

Freelancers and companies billing US clients use W-8BEN or W-8BEN-E to avoid 30% default withholding; whether the treaty's 'fees for included services' article applies depends on the nature of the service.

We review the income types, prepare W-8 forms and treaty disclosures, and make sure the US tax is credited correctly in the Indian return.

## Key facts

| Item | Detail |
| --- | --- |
| Dividends | 25% (15% for 10%+ corporate holders) |
| Interest | 15% (10% on bank loans) |
| Royalties / included services | 10–15% |
| Forms | W-8BEN (individuals), W-8BEN-E (entities) |
| Credit in India | Form 67 before the ITR |

## Who needs this

- Indian investors in US shares
- Indian freelancers and companies with US clients
- People resident in both countries

## What's included

- Treaty analysis
- W-8 forms
- Treaty disclosures
- Indian credit claims

## Documents

- Income documents
- Residency details
- Contracts with US clients

## Process

1. **Classify** — Income mapped to treaty articles.
2. **Document** — W-8 forms and disclosures prepared.
3. **Credit** — US tax credited in India.

Work that legally requires a US enrolled agent or CPA is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Do Indian freelancers pay US tax on payments from US clients?

Usually not, if the services are performed in India and the freelancer has no US permanent establishment; the US client typically needs a W-8BEN to not withhold.

### What does the student article cover?

Indian students in the US can exclude certain payments for maintenance and education and claim the standard deduction under the treaty, subject to conditions.

### Is W-8BEN filed with the IRS?

No. It is given to the US payer or broker and remains valid generally for three calendar years.

## Official sources

- IRS — Internal Revenue Service: https://www.irs.gov/

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Canonical page: https://www.industax.com/services/us-tax/india-us-tax-treaty
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.