NRI Dual Tax Calculator: Complete Guide
Everything you need to know, with real numbers and specific rules cited.
Here is the reality most NRIs discover too late: if you earn income in India while being a US tax resident, both countries want their cut. India taxes you because the income originates there (source-based taxation under the Income Tax Act 1961). The US taxes you because you are a tax resident, whether by green card or substantial presence (worldwide taxation under IRC Section 1 and Section 61). So your Rs 30,000/month Mumbai rental income gets hit with 31.2% Tax Deducted at Source (TDS) by India, and then shows up again on your US 1040 as foreign income. Without the India-US DTAA, you would pay full tax in both countries. With the DTAA, you get relief, but only if you know how to claim it.
Key Point
India taxes your income because it originates there. The US taxes it because you live there. Both are legally correct. The DTAA is the mechanism that prevents you from paying double.
Example
You earn Rs 5,00,000/year in NRO interest. India deducts 31.2% TDS = Rs 1,56,000. The US also wants tax on $5,988 (at 83.50 rate). Without DTAA credits, you would owe ~$1,437 to the US on top of the Rs 1,56,000 already paid to India. That is a 55%+ effective rate.