Hi I just started reading about TDS and income tax. I am going to start working soon in california and I have a question regarding TDS or general FD investments for NRIs:
Let’s say I save USD 20,000 after tax cuts in the US (total taxes are about 40% there). I decide to invest 10 lakh INR in india, should I choose an NRE FD or an NRO FD account? what will be my return in each case (after all further tax cuts)?
Let’s say my bank offers 9% return for an FD of 1 year.
in an NRO account, if there is a 30% TDS, (Is it 30% TDS even if I show my PAN card? will my PAN card be useless if I am an NRI? I heard TDS is 11.3% for other cases..what are those? this site shows TDS as 11.3% http://www.rupeetimes.com/article/fixed_deposits/complete_guide_to_tds_on_fixed_deposits_in_india_1006.html ) will my return be 70%(9%(10 lakhs)) = 0.63 lakhs? Do I need to pay anything extra here in the US based on this return of 0.63 lakhs?
what’s a DTAA? I am sure there must be a DTAA scheme for india for california residents.
If i make use of a DTAA, will I be able to reduce TDS in India or the extra tax I need to pay back in the US after I get the 0.63 lakh?