NRIs in the United States and Canada face a unique tax challenge: both the US and Canada have worldwide income taxation — meaning your Indian income may be taxable in both India and your country of residence. The India-US DTAA and India-Canada DTAA provide relief through foreign tax credits, but the process requires careful compliance on the Indian side, starting with Form 145 and Form 146. This guide explains what NRIs in the US and Canada need to know for 2026.
India-USA DTAA — Key Points for NRIs
India and the USA have a DTAA in force since 1990. Unlike the UAE DTAA, the India-US DTAA does not eliminate Indian tax — it prevents double taxation through the foreign tax credit mechanism. Income taxed in India (property sale gains, NRO interest, rental income) is eligible for a US foreign tax credit on your US federal return (Form 1040, Schedule A or Form 1116). Proper Indian compliance — including correctly issued Form 146 certificates with DTAA article references — ensures the IRS accepts your foreign tax credit without dispute.
Key provisions: Indian-source capital gains from immovable property are taxable in India; NRO interest is taxable in India at a maximum 15% rate under Article 11 of the India-US DTAA (reduced from the standard 30%); rental income is taxable in India. All Indian taxes paid are creditable against US tax on the same income.
India-Canada DTAA — Key Points for NRIs
The India-Canada DTAA has been in force since 1996. Similar to the India-US treaty, it operates through a foreign tax credit mechanism. Capital gains on Indian property are taxable in India. NRO interest is taxable at a maximum 15% rate under Article 11. Rental income is taxable in India. Canadian residents claim a foreign tax credit on their T1 general return using Form T2209. Our Form 146 certificates include the relevant DTAA article references required for CRA compliance.
How Form 145 and Form 146 Work for US/Canada NRIs
The process is identical regardless of your country of residence — what changes is the DTAA treaty applied and the TRC you need to obtain. For US residents, the TRC is IRS Form 6166 (Certificate of US Tax Residency), obtained by filing Form 8802 with the IRS. For Canadian residents, the TRC is a letter from the CRA confirming Canadian tax residency, or CRA Form NR301. Both must be obtained before we can apply DTAA benefits in your Form 146 certificate.
Lower TDS Certificate for US/Canada NRIs Selling Indian Property
US and Canada NRIs selling Indian property face the same 20%+ TDS issue as all other NRIs. On a ₹1.5 crore property, that is ₹30+ lakhs deducted at registration. A Lower TDS Certificate (Form 128) reduces this to TDS on the actual capital gain — saving ₹15–25 lakhs in most cases. Additionally, the properly documented capital gains computation in the Form 128 application helps ensure the correct Indian tax figure is available for your US/Canada foreign tax credit claim. Starting ₹7,999.
Documents Required for US/Canada NRIs
- PAN card and passport
- IRS Form 6166 (US TRC) or CRA residency confirmation letter (Canada TRC)
- Form 10F filed electronically on the Indian IT portal
- NRO bank account details
- Property documents (for Form 128 / Lower TDS Certificate)
Our Service
We handle Form 145, Form 146, Lower TDS Certificate, NRI ITR filing, and Foreign Tax Credit (Form 44) for NRIs across the USA and Canada. Our team is experienced with both the India-US and India-Canada DTAA provisions. Everything is done over email — no office visits required anywhere.
Email us at hello@nritaxca.com with a brief description of your situation. We respond within 2 hours with a fixed written quote.
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