ITR form and regime selection for US Stock gains and dividend income

Taxation
1

I’m a salaried individual and do India and US equity in the side.
My tax liability is similar in both tax regimes assuming I consider all deductions and exemptions.

Which income tax regime should I chose and if I chose new regime, will I be able to go back to old regime in future?
And which form do I use as I hold US equity and also have dividend income from them.

Thanks in advance :slight_smile:

2

Hey @Jab,

For income from capital gains (from both domestic and foreign equity) ITR-2 needs to be filed. In case you also do F/O or intraday trading which classifies as business income, you’d have to file ITR-3.

With regards to the regime, you can choose whichever is more beneficial to you. You can switch between the regimes every year.

However, if you have business/profession income, you can switch the regimes only once.

Hope this clarifies your query.

1 Like
3

@Jab
Hi,
You can select whichever regime suits you as the tax liability is almost similar.
However, as you have US equity along with the dividend income and salary income, in your case, ITR 2 will be applicable along with the reporting of US equity and income in the ITR.
Also kindly note that if you have received form 1042S for the TDS deducted on dividend income then you can claim it through Form 67 before filing the ITR.
Regards,
Aditya

1 Like
4

Thank you for your response.
I had selected Form 3 last year, but I didn’t have any business income. So in this case, can I only switch back to New regime once?

5

Thanks Aditya.
Could you please shed some light on how to go about submitted Form 67 and claiming the refund for US dividend income?
I’m confused as you mentioned that it can be claimed before filing ITR. Can we not claim while filing ITR itself and fill out Form 67 details there?

6

@Jab
Hi,
a) You have filed ITR-3 last year and selected old. Now you can opt for new regime. As you might be required to file ITR2 then in that you can choose any regime ( old or new) as per the suitability every year. It works differently if ITR-3 has to be filed and you need to opt for new regime.
b) Claiming TDS in Form 67 works in a different manner. You need to claim it before and then take the credit in your return using the DTAA provisions between India and US or any other country in that manner.
Regards,
Aditya

7

Hi,

From FY 23-24 onwards, the new regime has been made the default regime. Hence, you can opt for the new regime for this financial year. In case you have income from business/profession, you’ll have to file Form 10-IEA to opt for the old regime. Moreover, you can opt-in and out of the old regime only once.