do Indian residents pay tax on Roth IRA withdrawals

Based on the search results, it appears that Indian residents may have to pay taxes on Roth IRA withdrawals, but there is some lack of clarity:
  • There are two possible interpretations of the rules in India regarding Roth IRAs:
  1. Tax will be payable on maturity based on appreciation in value of the Roth IRA
  2. No tax will be paid in India since there is no taxable event on withdrawal in the US
  • The first, more conservative interpretation is what the Indian Income Tax Department might follow.
  • If you withdraw money from a Roth IRA before age 59.5, the 10% early withdrawal penalty in the US may be treated as fully taxable in India, without a foreign tax credit available.
  • Roth IRA withdrawals may be taxable in India even though contributions were made with post-tax money in the US. The tax-free growth and withdrawals in the US may not be respected by Indian tax law.
  • However, a new rule introduced in India's 2021 budget aims to prevent double taxation of foreign retirement accounts like Roth IRAs. The income will be taxed only at withdrawal, not annually. But the details are still being worked out.
So in summary, while there is still some ambiguity, it appears Indian residents may have to pay taxes on Roth IRA withdrawals, though the government is trying to address double taxation issues. Consulting a tax professional is advisable for specific situations.
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