Are you an Indian freelancer or entrepreneur planning to register a US LLC (Limited Liability Company) in Wyoming or Delaware? If so, you’re likely wondering:

• “Will my US LLC be taxed in India?”
• “Do I need to pay Indian income tax on US LLC earnings?”
• “Will GST apply to my LLC income from abroad?”

In this guide, we answer all these questions based on real tax expert insights, with a specific focus on US LLC tax implications for Indian residents, global income tax rules, and GST applicability in India.

Is Income from US LLC Taxable in India for Indian Residents?

Yes. Indian residents are liable to pay income tax on global income.

If you are an Indian resident under the Income Tax Act, your entire global income—including profits from a US LLC—is taxable in India, whether or not the money is remitted to India.

So, even if you keep the earnings within your US LLC bank account, you must report and pay taxes on that income in India.

This includes income earned as salary, consultancy fees, freelance revenue, SaaS subscriptions, or product sales through the US LLC.

Will the US LLC Itself Be Taxed in India?

No, the US LLC itself will not be taxed in India as a separate corporate entity.

If you form a single-member US LLC, it is considered a disregarded entity for US tax purposes, meaning:

• Income passes through to your personal tax return in the US (proforma filings only).
• No corporate tax in the US unless you have a Permanent Establishment (PE) or fixed place of business there.
• In India, the full income is taxable in your personal return.

You can also opt for the presumptive tax regime under Section 44AD or Section 44ADA, subject to conditions.

You’ll need to file:

• ITR-3
• Schedule FA (Foreign Assets)
• Schedule FSI (Foreign Source Income)

Is GST Registration Mandatory if I Earn via a US LLC?

GST registration in India is not required until your income exceeds ₹20 lakhs annually, but this threshold must be evaluated carefully.

However, be aware of:

• Reverse Charge Mechanism (RCM) on import of services.
• Export of services and zero-rated GST invoices if you receive foreign remittances into India.
• Filing of Letter of Undertaking (LUT) for claiming 0% GST on export of services.

GST on services provided from India via a US LLC is a grey area. However, if you remit funds from the LLC to India, raising a 0% GST invoice is generally expected.

ODI Compliance Under FEMA for Setting Up a US LLC

As an Indian resident forming a US LLC, you must comply with Overseas Direct Investment (ODI) rules under FEMA. Key points include:

• Mandatory reporting to RBI.
• Proper routing of funds.
• Annual compliance and returns.

Failure to comply with FEMA regulations can result in penalties, and can also affect your future ability to repatriate profits or expand globally.

Summary: Taxation of US LLC for Indian Residents

FAQs – Indian Residents Owning a US LLC

Q1. Can an Indian resident form a US LLC?
Yes, but RBI’s FEMA ODI rules must be followed.

Q2. Will my LLC income be taxed twice?
No, since the US LLC is a pass-through entity, and the US doesn’t tax non-resident income unless PE exists. You pay tax only in India.

Q3. What form do I file in India if I own a US LLC?
You must file ITR-3, with Schedule FA (Foreign Assets) and Schedule FSI (Foreign Income).

Q4. Do I need a GST number?
Only if you cross ₹20 lakh turnover or fall under RCM due to import of services. You may still need to issue zero-rated GST invoices for foreign remittances.

Need Help with US LLC Compliance in India?

At Dinesh Aarjav & Associates, we specialize in:

• US LLC tax implications for Indian freelancers
• FEMA ODI compliance
• Global income tax filing
• GST advisory for exports & reverse charge
• NRI tax advisory services for individuals with global income and cross-border operations