Withhodling tax
This query is : Resolved
15 July 2011
I understand that withholding tax is a form of TDS.
But why do they have a different name.
How can we claim such amount.
But why do they have a different name.
How can we claim such amount.
15 July 2011
you can claim TDS after filing your income tax returns.
15 July 2011
Is it after filing the returns or in the returns that we have to claim.
15 July 2011
Refund need to be claim & shown in return and amount you may get after department approved your return
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16 July 2011
For example if i sell the shares allotted to me by my employer as joining bonus which is listed in the US and make a capital gain. Suppose i am a permanent resident of india and all my income is taxable in india.
As per the provisions the company (broker) has deducted some tax and is with the government. Based on the documents if i claim the refund / tax credit, how should i treat the income. Whether it will be treated as a transaction that has happened in India or as per the US tax laws.
Regards
As per the provisions the company (broker) has deducted some tax and is with the government. Based on the documents if i claim the refund / tax credit, how should i treat the income. Whether it will be treated as a transaction that has happened in India or as per the US tax laws.
Regards
03 August 2025
Great questions! Let me break it down:
1. Why is withholding tax called differently than TDS?
Withholding tax is a general international term used globally for tax deducted at source on certain payments (like dividends, interest, royalties, etc.) made to non-residents or foreign entities.
TDS (Tax Deducted at Source) is the term used in Indian tax law for tax deduction on payments to residents or non-residents.
Basically, withholding tax is a broad concept, and TDS is the Indian implementation of it. When India deducts tax on payments to non-residents under tax treaties or domestic law, it's often called withholding tax.
2. How to claim such withheld tax amount?
In India, tax deducted at source (TDS) or withholding tax can be claimed as a credit when you file your Income Tax Return (ITR).
You should show the gross income, then the tax deducted/withheld under the TDS section in your ITR.
If the tax withheld is more than your actual tax liability, you can claim a refund for the excess.
The tax deducted will also be reflected in your Form 26AS (tax credit statement).
3. On your example: Shares allotted by employer, sold in the US
If you are a resident of India for tax purposes, your global income is taxable in India.
The tax deducted by the US broker (withholding tax) can be claimed as foreign tax credit in India subject to DTAA (Double Tax Avoidance Agreement) provisions between India and the US.
You have to declare the capital gains in your Indian ITR and then claim the foreign tax credit on the tax paid abroad.
The transaction is considered to have happened abroad (US) but the income is taxable in India as per your residential status.
1. Why is withholding tax called differently than TDS?
Withholding tax is a general international term used globally for tax deducted at source on certain payments (like dividends, interest, royalties, etc.) made to non-residents or foreign entities.
TDS (Tax Deducted at Source) is the term used in Indian tax law for tax deduction on payments to residents or non-residents.
Basically, withholding tax is a broad concept, and TDS is the Indian implementation of it. When India deducts tax on payments to non-residents under tax treaties or domestic law, it's often called withholding tax.
2. How to claim such withheld tax amount?
In India, tax deducted at source (TDS) or withholding tax can be claimed as a credit when you file your Income Tax Return (ITR).
You should show the gross income, then the tax deducted/withheld under the TDS section in your ITR.
If the tax withheld is more than your actual tax liability, you can claim a refund for the excess.
The tax deducted will also be reflected in your Form 26AS (tax credit statement).
3. On your example: Shares allotted by employer, sold in the US
If you are a resident of India for tax purposes, your global income is taxable in India.
The tax deducted by the US broker (withholding tax) can be claimed as foreign tax credit in India subject to DTAA (Double Tax Avoidance Agreement) provisions between India and the US.
You have to declare the capital gains in your Indian ITR and then claim the foreign tax credit on the tax paid abroad.
The transaction is considered to have happened abroad (US) but the income is taxable in India as per your residential status.
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