India and the US have a tax treaty (DTAA) that can cut Withholding Tax on dividends, interest, royalties and fees paid to a US parent and relieve double tax on expats. They do not, as far as we know, have a social security (totalization) agreement, so a US expat in India can owe contributions to both countries. Plan the two separately: the treaty is a claim you file; social security is a structure you choose.
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Key facts
| Tax treaty | Convention between India and the United States for the avoidance of double taxation; applies to income tax, not social security taxes (Article 2) |
|---|---|
| Indian law behind it | Section 159 of the Income-tax Act, 2025 (previously Sections 90 and 90A of the 1961 Act): treaty applies where more beneficial |
| Social security agreement | No US-India totalization agreement known to be in force; check the SSA list |
| Indian side for expats | Provident fund (EPF) rules for international workers; no contribution ceiling unless excluded |
| US side for expats | FICA or self-employment tax can continue depending on who employs the person |
| Who should read this | US finance and HR teams paying an Indian subsidiary, or sending staff to India |
What this guide covers
| Question | Guide |
|---|---|
| How does the India-US tax treaty work? | India-US tax treaty (DTAA) explained |
| What Withholding Tax rate applies to payments to the US? | Treaty withholding rates |
| What documents do we need to claim treaty rates? | Claiming treaty benefits: Form 6166 and Form 41 |
| Which country taxes our expat and how is double tax relieved? | Tax residency for US expats in India |
| Is there a social security agreement between the US and India? | Social security for US expats in India |
| Does an expat have to contribute to Indian provident fund? | EPF for international workers |
| Does US Social Security tax still apply to an American in India? | US Social Security (FICA) for Americans in India |
| Where are the quick answers? | Treaty and social security FAQs |
Two systems, two different answers
A tax treaty and a social security agreement are separate instruments. The India-US tax treaty exists and is widely used. It does not cover social security taxes. A social security (totalization) agreement would stop a worker paying into two countries for the same job, and the US has such agreements with many countries. We are not aware of one with India in force, so each country's rules apply on their own terms.
A practical path for a US company
- Payments to the parent. Collect the US Tax Residency Certificate and Form 41 (previously Form 10F) before the first dividend, fee or royalty. See claiming treaty benefits.
- Rates. Confirm the treaty rate for each payment type before remitting. See withholding rates.
- People. For each expat, decide who employs them: the US parent, the Indian subsidiary or an Employer of Record. That choice drives both income tax and social security.
- Social security. Test Indian provident fund exposure and the US FICA position together, and document the decision.
- Permanent establishment. Review whether expats or local staff create a taxable presence for the parent. See treaty and PE risk.
Who this is for
- US companies with an Indian subsidiary that pay dividends, service fees, royalties or interest back to the US.
- HR and finance teams seconding or hiring US citizens and green card holders in India.
- US founders relocating to India to run the subsidiary.
The guides in this series
The India-US Tax Treaty (DTAA) Explained: Scope, Residency and Relief from Double Tax
How the India-US tax treaty works: who qualifies, which taxes it covers, how treaty and domestic law interact, residency, relief from double tax and disputes.
Read the guide →India-US DTAA Withholding Tax Rates: Dividends, Interest, Royalties and Fees for Included Services
Treaty rates for payments from India to the US: dividends 15% or 25%, interest 10% or 15%, royalties and fees 10% or 15%. Conditions and how to apply them.
Read the guide →How to Claim India-US Treaty Benefits: Form 6166, Form 41 and Beneficial Ownership
Documents needed to claim India-US treaty rates: IRS Form 6166, Form 41 (previously Form 10F), no-PE declaration and beneficial ownership.
Read the guide →Tax Residency for US Expats in India: Residency Tests, Treaty Tie-Breaker and Double Tax Relief
Which country taxes a US expat in India: Indian residency tests, US worldwide tax, the treaty tie-breaker, foreign tax credit and exclusion.
Read the guide →Social Security for US Expats in India: Is There a US-India Totalization Agreement?
Is there a US-India social security agreement? What applies to a US expat in India: provident fund, US FICA, double coverage and planning.
Read the guide →EPF for International Workers in India: What US Expats and Their Employers Must Know
How Indian provident fund applies to foreign nationals: international worker rules, no wage ceiling, withdrawal, court rulings and the 2026 EPF Scheme.
Read the guide →US Social Security and FICA for Americans Working in India: Who Pays and When
When Social Security and Medicare tax apply to Americans working in India: US employer, Indian subsidiary, Section 3121(l) agreements and self-employment.
Read the guide →What this means for a US parent
- Treat treaty paperwork and expat structuring as two workstreams with two owners. The first sits with finance, the second with HR and tax together.
- Ask your US CPA to confirm the US side of every point here. US tax and Social Security are outside AU Corporate's practice.
Mistakes to avoid
- Assuming the tax treaty also covers social security.
- Remitting to the parent before treaty documents are in place.
- Moving an expat onto Indian payroll without testing provident fund and FICA first.
- Treating rates quoted on the internet as final without checking the payment type and the tax year.
How AU Corporate handles this
We handle Withholding Tax and treaty claims on remittances, and we structure and run expat payroll, provident fund and tax filings in India.
Related services: Taxation and regulatory services · HR and payroll
Official sources
Rules on this page can be verified at the primary sources: the Income Tax Department, the Internal Revenue Service, the US Social Security Administration and the Employees' Provident Fund Organisation.
Frequently asked questions
Does India have a tax treaty with the United States?
Yes. The India-US double taxation avoidance agreement (DTAA) covers income tax and can reduce Withholding Tax on dividends, interest, royalties and fees, and relieve double taxation.
Is there a social security agreement between India and the US?
We are not aware of a US-India totalization agreement in force as of October 2026. Check the list of agreements on the US Social Security Administration website.
Does the tax treaty cover social security taxes?
No. Article 2 of the India-US treaty excludes US social security taxes from the covered taxes.
Can a US expat pay social security in both India and the US?
Yes, it is possible. Without a totalization agreement, Indian provident fund rules and US FICA or self-employment tax can both apply, depending on the structure.
Which Indian section gives effect to tax treaties now?
Section 159 of the Income-tax Act, 2025 (previously Sections 90 and 90A of the 1961 Act). A treaty applies where it is more beneficial to the taxpayer.
Where should a US company start?
With the payments to the parent: obtain the Tax Residency Certificate and Form 41 before the first remittance. Then plan expat employment and social security.
Do these rules change often?
Yes. Rates, forms and provident fund rules change, and the Income-tax Act, 2025 has renamed many sections and forms. Confirm current rules before acting.
Who prepares US filings such as Form 5471 or FICA reporting?
Your US CPA. AU Corporate provides the Indian financial data and handles the Indian side.
Are there more answers on this topic?
Yes. See the dedicated treaty and social security FAQ page, which answers 50 questions.
Does an Employer of Record change the social security answer?
It changes who the legal employer is, which affects both Indian provident fund and the US FICA analysis. Test it before choosing the model.
Related guides
The India-US Tax Treaty and Permanent Establishment Risk for US Companies
How the India-US tax treaty applies to payments to your US parent: Withholding Tax rates, Tax Residency Certificate, Form 41 and permanent establishment risk.
Read the guide →Repatriating Profits to the US: Dividends, Fees, Royalties, Loans and the Paperwork
How a US parent receives money from its Indian subsidiary: dividends, service fees, royalties, loans. Forms 145 and 146, Withholding Tax and DTAA relief.
Read the guide →Sending a US Executive to India: Visa, Housing, Banking and Tax
How to relocate a US executive to India: employment visa, FRRO registration, housing, banking, tax residency and permanent establishment risk for the parent.
Read the guide →US Parent Obligations When You Own an Indian Subsidiary
US reporting that follows when you own an Indian subsidiary: Form 5471, FBAR, Form 8938 and international tax regimes. A guide for US finance teams.
Read the guide →Sources
Last updated 14 October 2026. General information only, not legal or tax advice. Indian rules change often; confirm current requirements before acting.