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India-US Tax Treaty for LLC Owners

The India-US tax treaty (active since 1989) reduces US withholding on cross-border income. Wyoming LLC owners residing in India use Form W-8BEN-E to claim treaty benefits.

Answer

The India-US tax treaty (active since 1989) reduces default 30% US withholding on US-source income paid to Indian residents. Treaty rates include 15% on dividends (or 25% for certain dividends), 15% on royalties, 10-15% on interest. Indian residents owning Wyoming LLCs file Form W-8BEN-E with US payers to claim these rates. Article 7 (Business Profits) generally exempts non-ECI business income from US tax. Indian residents still owe Indian tax on worldwide income including LLC pass-through revenue.

By Zawwad, Founder & CEO, WyomingLLC by Topslice LLC.

Last updated May 20, 2026

Key treaty articles

  • Article 7 (Business Profits): business profits taxable only in country of residence unless US permanent establishment
  • Article 10 (Dividends): 15% on most dividends (25% if from REIT)
  • Article 11 (Interest): 10-15% on interest
  • Article 12 (Royalties): 15% on royalties
  • Article 4 (Residence): tie-breaker rules
  • Article 25 (Mutual Agreement Procedure): resolution of double-tax disputes

Indian tax on LLC income

  • India taxes worldwide income for resident Indians (Income Tax Act 1961 Section 5)
  • LLC pass-through income reported on your ITR
  • Schedule FA disclosure of foreign assets required
  • Foreign tax credit available for any US tax paid (Section 90/91)
  • Consult Indian CA familiar with US LLC structures

How to claim treaty benefits

  1. File Form W-8BEN-E with each US payer
  2. Line 5: Country of residence = India
  3. Part III: Cite Article 10 (dividends), Article 11 (interest), or Article 12 (royalties)
  4. Line 8: LLC EIN as US TIN
  5. Line 9: Indian PAN as foreign TIN (optional)
  6. Renew every 3 years

Frequently asked questions

Is the India-US treaty active?
Yes. Active since 1989. Still in force in 2026.
What is the dividend withholding rate?
15% under treaty (25% on certain dividends). Default without treaty: 30%.
Do I owe Indian tax on LLC income?
Yes. India taxes worldwide income for residents. Foreign tax credit available for US tax paid.
Do I need PAN for the treaty claim?
Helpful but not strictly required. Line 9 of W-8BEN-E asks for foreign TIN; most US payers accept the claim without it.

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