• Share of profit in US LLC

I am an indian resident and partner in US LLC. I am paying tax on the share of profit in us llc by filing my return of income in usa. I want to know how to include the income from share of profit from US LLC as the share of income from partnership is exempted as per the Indian Income tax Act. If it is to be included with my other income in India and taxed in India then whether I will be entitle for the rebate for the taxes paid in USA.
Asked 6 years ago in Income Tax

Your share of profit from US firm won't be exempt in India as in India the share of profit from partnership firm whose income is assessed and taxed in India. Since the us firm has not paid any tax in India and you being an Indian resident you global income will be taxed in India. However you can claim credit of tax paid in US while filing your income tax return in India.

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Naman Maloo
CA, Jaipur
4292 Answers
101 Consultations

 

I hope you are not a managing partner in LLC. There are certain issues like control and management which arise when operation is managed partly form India and hence tax exposure for US LLc.

Since, you are Indian resident your worldwide income is taxable in India. Hence your share of profit will be taxable in India.  The Indian tax laws provides for claiming credit for income which is double taxed i.e. in India and foreign country. You should offer the share of profit as business income and claim credit of the tax paid.  Sec 90 of the Income-tax Act provides for allowing credit for tax paid abroad. It also provides the manner of computation.

Also, India-US DTAA has such provision, but needs to adopt only after giving supporting..

Jasmina Jain Shah
CA, Greater Mumbai
458 Answers
4 Consultations

Hi

 

Since Tax has already been paid in foreign country,tax credit will be available for the same in India.

 

 

Hope it helps

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

Dear Sir,

 

Hope you are doing well !!

 

As per the Income-tax provisions, a resident taxpayer needs to disclose global income in his Income-tax return.

In short, income earned in India as well as income earned abroad is taxable for resident taxpayer subject to DTAA(Double Taxation Avoidance Agreement) with the foreign countries.

Incomes earned in India are required to be disclosed normally in Income-tax forms.

 

However, you can claim a credit of such foreign taxes paid against your tax payable in India.

Payal Chhajed
CA, Mumbai
5188 Answers
299 Consultations

Hi sir,

 

income from US is not taxable in infia but you have to disclose in indian Income Tax return when you file for your Indian income disclosure.

Rajkumar Wagh
CA, Kolhapur
45 Answers

Hi,

 

Rule-Include the income under the head to which it belongs – include salary income under the head ‘salaries’ etc.

 

However, you may include the share of profit from LLC to your other income in India and claim the relief for the taxes paid in USA in your personal return.

Payal Chhajed
CA, Mumbai
5188 Answers
299 Consultations

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