US companies deduct a 25% withholding tax on dividends before the amount is credited to your US wallet. In India, the net dividend (after US tax) is taxable again at your income tax slab rate. However, under the India-US Double Tax Avoidance Agreement (DTAA), you can claim a Foreign Tax Credit for the 25% already paid in the US, so you don't pay tax twice on the same income.
💡To claim DTAA relief, you must file Form 67 on the Income Tax portal before submitting your ITR. Missing this deadline means losing the tax credit.
Related FAQs

