Indian resident owning dividend-paying shares in company based in France: Can I save on withholding tax?
France taxes capital / dividend gains accrued in France. Hence you will not be able to reduce this liability. India does have a Double Tax Avoidance Treaty with France and you can claim relief for the tax paid in France.
It's important to remember what a share is.  It's a tiny portion of ownership of a company. Let's pretend we're talking about shares in a manufacturing company.  The company has one million shares on its register.  You own one thousand of them.  That means that you own 1/1000th of the company. These shares are valued by the market at $10 per share.  The company has machinery and land worth $1M.  That means that for every dollar of the company you own, 10c of that value is backed by the physical assets of the company.  If the company closed shop tomorrow, you could, in theory at least, get $1 back per share.  The other $9 of the share value is value based on speculation about the future and current ability of the company to grow and earn income. The company is using its $1M in assets and land to produce goods which cost the company $1M in ongoing costs (wages, marketing, raw cost of goods etc...) to produce and make $2M per year in sales.  That means the company is making a profit of $1M per annum (let's assume for the sake of simplicity that this profit is after tax). Now what can the company do with its $1M profit?  It can hand it out to the owners of the company (which means you would get a $1 dividend each year for each share that you own) or it can re-invest that money into additional equipment, product lines or something which will grow the business.  The dividend would be nice, but if the owners bought $500k worth of new machinery and land and spent another $500k on ongoing costs and next year we would end up with a profit of $1.5M. So in ten years time, if the company paid out everything in dividends, you would have doubled your money, but they would have machines which are ten years older and would not have grown in value for that entire time.  However, if they reinvested their profits, the compounding growth will have resulted in a company many times larger than it started. Eventually in practice there is a limit to the growth of most companies and it is at this limit where dividends should be being paid out.  But in most cases you don't want a company to pay a dividend.  Remember that dividends are taxed, meaning that the government eats into your profits today instead of in the distant future where your money will have grown much higher. Dividends are bad for long term growth, despite the rather nice feeling they give when they hit your bank account (this is a simplification but is generally true). TL;DR - A company that holds and reinvests its profits can become larger and grow faster making more profit in the future to eventually pay out.  Do you want a $1 dividend every year for the next 10 years or do you want a $10 dividend in 5 years time instead? How much amount can we transfer from India to the USA? Is the limit per year? As I understand your father in law is Indian Citizen and his tax paid earnings need to be transferred outside of India. Under the Liberalized Remittance Scheme by RBI, one can transfer upto 2,50,000 USD. Please check with your Bank for the exact paperwork. A form 15CA and 15CB [by CA] are required to establish taxes have been paid. What documents we have to present to the bank? See above. Should money be transferred to company's account(Indian Company) to USA company? or can be transferred to my husband's account. Transfer of funds by a Indian Company to US Company has some restrictions. Please check with CA for details. If you father in law has sold the Indian Company and paid the taxes in India; he can transfer the proceeds to his son in US as per the Liberalized Remittance Scheme. Can they just gift the whole amount to my husband? What will be the tax implication on my husband's part in USA and on my father in law in India. The whole amount can be gifted by your father in law to your husband [his son]. There is no tax implication in India as being an Indian resident, gift between close relatives is tax free. There is no tax implication to your husband as he is a US Citizen and as per gift tax the person giving the gift should be paying the applicable taxes. Since the person gifting is not US Citizen; this is not applicable. "A stock, at its most basic, is worth exactly what someone else will pay to buy it right now (or in the near future), just like anything else of value. However, what someone's willing to pay for it is typically based on what the person can get from it. There are a couple of ways to value a stock. The first way is on expected earnings per share, most of would normally (but not always) be paid in dividends. This is a metric that can be calculated based on the most recently reported earnings, and can be estimated based on news about the company or the industry its in (or those of suppliers, likely buyers, etc) to predict future earnings. Let's say the stock price is exactly $100 right now, and you buy one share. In one quarter, the company is expected to pay out $2 per share in dividends. That is a 2% ROI realized in 3 months. If you took that $2 and blew it on... coffee, maybe, or you stuffed it in your mattress, you'd realize a total gain of $8 in one year, or in ROI terms an annual rate of 8%. However, if you reinvested the money, you'd be making money on that money, and would have a little more. You can calculate the exact percentage using the ""future value"" formula. Conversely, if you wanted to know what you should pay, given this level of earnings per share, to realize a given rate of return, you can use the ""present value"" formula. If you wanted a 9% return on your money, you'd pay less for the stock than its current value, all other things being equal. Vice-versa if you were happy with a lesser rate of return. The current rate of return based on stock price and current earnings is what the market as a whole is willing to tolerate. This is how bonds are valued, based on a desired rate of return by the market, and it also works for stocks, with the caveat that the dividends, and what you'll get back at the ""end"", are no longer constant as they are with a bond. Now, in your case, the company doesn't pay dividends. Ever. It simply retains all the earnings it's ever made, reinvesting them into doing new things or more things. By the above method, the rate of return from dividends alone is zero, and so the future value of your investment is whatever you paid for it. People don't like it when the best case for their money is that it just sits there. However, there's another way to think of the stock's value, which is it's more core definition; a share of the company itself. If the company is profitable, and keeps all this profit, then a share of the company equals, in part, a share of that retained earnings. This is very simplistic, but if the company's assets are worth 1 billion dollars, and it has one hundred million shares of stock, each share of stock is worth $10, because that's the value of that fraction of the company as divided up among all outstanding shares. If the company then reports earnings of $100 million, the value of the company is now 1.1 billion, and its stock should go up to $11 per share, because that's the new value of one ten-millionth of the company's value. Your ROI on this stock is $1, in whatever time period the reporting happens (typically quarterly, giving this stock a roughly 4% APY). This is a totally valid way to value stocks and to shop for them; it's very similar to how commodities, for instance gold, are bought and sold. Gold never pays you dividends. Doesn't give you voting rights either. Its value at any given time is solely what someone else will pay to have it. That's just fine with a lot of people right now; gold's currently trading at around $1,700 an ounce, and it's been the biggest moneymaker in our economy since the bottom fell out of the housing market (if you'd bought gold in 2008, you would have more than doubled your money in 4 years; I challenge you to find anything else that's done nearly as well over the same time). In reality, a combination of both of these valuation methods are used to value stocks. If a stock pays dividends, then each person gets money now, but because there's less retained earnings and thus less change in the total asset value of the company, the actual share price doesn't move (much). If a stock doesn't pay dividends, then people only get money when they cash out the actual stock, but if the company is profitable (Apple, BH, etc) then one share should grow in value as the value of that small fraction of the company continues to grow. Both of these are sources of ROI, and both are seen in a company that will both retain some earnings and pay out dividends on the rest." "Transferring the money or keeping it in US does has no effect on taxes. Your residency status has. Assuming you are Resident Alien in US for tax purpose and have paid the taxes to IRS and you are ""Non-Resident"" Indian for tax purposes in India as you are more than 182 outside India. How would it effect my Tax in US and India If you are ""Non-Resident"" in India for tax purposes, there is no tax liability of this in India. I have transferred an amount of approx 15-20k$ to Indian Account (not NRE) By RBI regulation, if you are ""Non-Resident"" then you should get your savings account converted to ""NRO"". You may not may not choose to open an NRE account. To keep the paper work clear it helps that you open an NRE account in India. Any investment needed ? Where do i need to declare if any ? These are not relevant.  Note any income generated in India, i.e. interest in Savings account / FDs / Rent etc; taxes need to be paid in India and declared in US and taxes paid in US as well. There is some relief under DTAA. There are quite a few question on this site that will help you clarify what needs to be done." As NRI/PIO (Non-Resident Indian/Person of Indian Origin), the overseas income and transfers in foreign currency are exempt from Indian income taxes. However, the account in India has to be designated NRE or FCNR. There are three kind of accounts that an NRI can maintain Interest earned in NRE and FCNR accounts is exempt from income taxes. Interest earned in NRO accounts is not exempt from income taxes, in fact banks would withhold about 30% of interest (TDS). The exact tax liability would depend upon income generated in India and TDS could be applied towards that liability when the tax returns are filed. There are other implications also of designating the account as NRE or NRO. NRE accounts can only be funded via inward remittance of permitted foreign currency e.g. deposit USD/GBP. So proceeds like rental income, pension etc. that are generated in INR within India can't be deposited in this account. The money deposited in NRE account can grow tax free and can be converted back in any foreign currency freely. On the other hand NRO accounts can be funded through both inward remittance of permitted foreign currency or local income e.g. rental, pension etc. All the amount in this account is treated as Indian originated INR (even if remitted in foreign currency) and thus is taxed as any other bank account. The amount in this account is subject to the annual cap of convertibility of USD 1 million. Both NRE and NRO accounts are maintained in INR and can be Saving and Term Deposit. Any remittance made to these accounts in any foreign currency is converted to INR at the time of deposit and is maintained in INR. FCNR account are held in foreign currency and can only be Term Deposit. Official definitions: Accounts for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) "You will always pay the 10% penalty and the income tax on the money, so even if you withdraw amounts below the taxable limits - you still pay 10% tax. However, you can probably offset that from your Indian tax liability on the money. If you convert it to Roth - you should check with an Indian tax accountant/adviser what the Indian tax treatment would be. It is likely that ""Roth"" advantages are unrecognized by foreign countries, so you may end up paying taxes on both the conversion (in the US) and the distribution (in India). Check with a tax adviser who's knowledgeable about the Indo-US tax treaty and the tax laws in both the countries, this may be trickier than people with no international tax experience may think." After that I moved to the Middle East on March 23rd, 2015 As an NRI, one should not hold any Savings account. Please have this converted to NRO Account. Additionally it is advised that you open an NRE account. Both these can be done remotely. If I transfer money from here to a non NRE/NRO account then is it taxable? Assuming its income earned when you are NRI, it is not taxable. However if there is audit enquiry you would need to have sufficient proof to back that this income is earned during your period as NRI and hence not taxable. As indicate above, holding a savings account when you are NRI is a breach of FEMA regulation.  I have been getting mail from myITreturns.com to file income tax returns. Since I am considered as NRI, do I have to fill any non return form online? If there is a source of income in India, interest on savings account etc, it is taxable and you would need to file appropriate returns. Even if you have zero income, it is safe to file a NIL return. For the year 2014 do I have to file income tax returns? For the financial year 1st April 2014 to 31st March 2015, you are still a resident Indian for tax purposes. You should have filed the return by June 2015 if there was tax due, else by March 2016. If you have not done so, please do this ASAP and regularise it. Here is how it should look: 100 shares of restricted stock (RSU) vest. 25 shares sold to pay for taxes. W2 (and probably paycheck) shows your income going up by 100 shares worth and your taxes withheld going up by 25 shares worth. Now you own 75 shares with after-tax money. If you stop here, there would be no stock sale and no tax issues.  You'd have just earned W2 income and withheld taxes through your W2 job. Now, when you sell those 75 shares whether it is the same day or years later, the basis for those 75 shares is adjusted by the amount that went in to your W2.   So if they were bought for $20, your adjusted basis would be 75*$20.