enfrdeitptrues

Question - 5: Do I report interests on my Indian NRI bank deposits (FD) in my 1040? Tax on this income is already withheld at Source (TDS). How do I claim tax credit for this in (my US returns)?

Details
Category: NRI Questions and Answers

First you have to decide whether you want to take the foreign taxes you paid as a tax deduction or tax credit. Taking the tax deduction is easy, just enter the taxes you paid on the India NRI account on Line 8 Other Taxes on Schedule A - Itemized Deductions.  If you take the tax credit instead, you will have to fill out Form 1116 Foreign Tax Credit.  Note, there is a max amount you can take as a credit, but you can keep carrying it over to the next year.