USA – INDIA J-1 Tax Treaty (Professors, Teachers, and Research Scholars)
US – India Tax Treaty Article 22 provides an exemption from tax in a USA for Professors, Teachers, and Research Scholars who visits the USA for the purpose of teaching or engaging in research at a university, college or other recognized educational institution if the individual is a resident of India
The exemption applies to any remuneration for such teaching or research. The exemption from tax applies for a period not exceeding two years from the date he first visits the Contracting USA for the purpose of teaching or engaging in research at a university, college or other recognized educational institution there.
Paragraph 2 provides that Article 22 shall apply to income from research only if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other private person or persons. If a professor or teacher remains in the USA for more than the specified two-year period, he may be subject to US taxes, for the entire period of his presence.
What Happens when an India Student passes the substantial Presence Test?
An Indian Professors, Teachers, and Research Scholars who visits the United States in such capacity and becomes a U.S. resident according to the Code, would continue to be exempt from U.S. tax in accordance with the tax treaty so long as he is not a U.S. citizen and does not acquire immigrant status in the United States.
The saving clause does apply to U.S. citizens and immigrants, such as green card holders.
***Disclaimer: I am a tax accountant and a CPA licensed in Massachusetts , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**