Why does my Indian tax credit not match the certificate my deductor gave me?
Because credit in the Indian system follows what has been reported and matched against your tax identifier, not what is written on the paper you were handed. A deductor can issue a perfectly worded certificate and still have filed their return late, filed it against the wrong identifier, or not remitted the amount at all. Until it appears in the department's statement of credits against your identifier, it is not usable in your return. So the certificate is the starting point for a conversation with the deductor, and the department's own statement is the thing to reconcile to before filing.
What is TDS and how is it different from paying the tax myself?
TDS is tax deducted at source: the person paying you takes an amount off at the moment of payment and remits it to the Indian authority on your behalf, instead of leaving you to pay it later. It is not a separate tax and it is not usually your final liability. It is an advance collection held against whatever your return works out, which means it can easily exceed the tax due, particularly where the deduction is computed on a gross receipt rather than on the income inside it. The return is what reconciles the two.
The deductor used the wrong tax identifier, so can I still claim credit?
It is fixable, but not by you and not quickly. The credit attaches to the identifier the deduction was reported against, so a deduction reported against a wrong or missing identifier will not appear in your statement, whatever the certificate says. The correction is made by the deductor, by revising the return in which they reported it. That means going back to a payer who has no particular incentive to help, with the specific detail of what was reported and what it should say. Check the statement early in the year, while the deductor still has the file open.
How do I claim credit in Canada for tax deducted in India?
Relief for Indian tax on income that is also taxable in your country of residence generally runs through a credit in the return there, and the practical difficulty is evidence and timing rather than principle. You have to show what income was taxed in India and what tax was borne on it, and the two systems may not put that income in the same tax year, so the credit can be claimable in a year other than the one in which the deduction happened. Where the deduction exceeded the Indian tax actually due, only the tax finally payable is relievable, which is another reason to settle the Indian return first.
Do I still have to file an Indian return if TDS was deducted?
Usually yes, and it is generally in your interest. The deduction is an amount collected in advance, so where it exceeds the tax on the income, which is common where it was taken on a gross receipt, the return is the only route by which the excess comes back. A return also fixes the amount of Indian tax finally borne, which is the figure another country's credit system will ask for. Assuming the deduction closed the matter is how excess deductions are quietly abandoned and how credit claims elsewhere end up unsupported.
What should I check before a payer deducts TDS from my income?
Three things, in this order. That the payer holds your correct tax identifier, so the deduction can be matched to you. The rate and basis they intend to apply, including whether they are computing it on a gross receipt. And whether the payment supports an advance application to have the deduction reduced. All three are easier before the first payment than after it. Once a deduction has been made and reported, you depend on the payer for corrections and on the department's statement for credit, and both move at their own pace.
Which kind of investor income is most exposed to double taxation?
Dividends from a foreign corporation. They have already borne corporate tax, the source country withholds on payment, and your residence country taxes the receipt — three layers, only two of which a credit can reach. Interest and royalties carry the same source withholding without the corporate layer. This is why the withholding article and the paperwork that reduces it matter more for portfolio income than for salary. See dividends, interest and royalties articles.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
