Which country taxes fees for services I perform in India?
The services article decides it, and it carries its own conditions rather than a single rule. What matters is the character of the work, where it is performed, how long you are present and who bears the cost. Two engagements that look similar commercially can land in different countries once those conditions are applied. This is the article people quote from memory and then find does not say what they assumed. Read it against your own facts before invoicing, because the payer's withholding decision is made when it pays, not when the return is filed.
Does the treaty cover my stipend as a student in the US?
There is an article for students, and like the others it applies on conditions rather than automatically. The nature of the payment, its source, the purpose of your presence and how long you have been there all feed into whether it is covered, and for how long. A payment that is exempt in one year is not necessarily exempt in the next. Establish which article your payment falls under, keep evidence of the purpose and duration of your stay, and disclose the position on the return rather than simply omitting the income.
Do I still report income the treaty exempts?
Generally yes. Where the treaty exempts income, the position may still have to be disclosed on the return, and disclosure is a separate obligation from taxability. Omitting the income altogether leaves no record of the claim, which is the weakest place to be if the year is examined later. Report the income, claim the article, and keep the facts that support it in the file. That also makes the following year straightforward, because the position is written down rather than reconstructed from memory when the next return falls due.
How much can India withhold on royalties paid to me?
The relevant article caps the withholding rate, so the answer is a ceiling rather than one universal number: it depends on which article covers the payment and on the version of the treaty in force for the year. What is consistent is the mechanism. The cap applies only where the payer holds residence evidence before it pays; otherwise it deducts at the domestic rate and you recover the difference afterwards. Characterise the payment, find the article that covers it, and get the documentation to the payer before the first invoice is raised.
I am a US citizen living in India — can I use the treaty?
Partly. For a US filer the treaty has to be read alongside citizenship-based taxation, which continues regardless of where you live. Several reliefs that a non-citizen resident of India could claim are cut back, so a claim that reads well in the article may not survive that interaction. The work usually shifts to credit relief, and to sequencing the two returns correctly, rather than to exempting income. Establish residence, identify the article, then test the claim against the citizenship rules before relying on it in a computation.
What does a payer need before applying the treaty rate?
Residence evidence, and it has to be in the payer's hands before the payment is made. The claim depends on proving where you are resident for the period in question, and the payer is the party carrying the risk of applying a reduced rate without support. If the documentation arrives late, the deduction is made at the domestic rate and the position becomes a recovery exercise instead of a lower deduction. Ask the payer what it needs and what it already holds, and keep track of when the evidence expires.
Is a tax treaty the same thing as a totalization agreement?
No, and being covered by one says nothing about the other. An income tax treaty deals with income tax. A totalization or social security agreement deals with contributions — which country's social security system you pay into while working abroad, and how periods in two systems combine for benefit eligibility. Canada and the United States have both; plenty of country pairs have one and not the other. See totalization agreements.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
