Standard Deduction: Indian students can claim the U.S.-India Tax Treaty for students deduction (for the 2008 tax year: $5350 on line 11 Form 1040NR-EZ). This is in addition to the exemption deduction for all international students on line 13, which is also available to students from India . It is $3,400 this year.

It is very important to flip to the next page of the 1040NR-EZ and ALSO write the words "standard deduction allowed under US-India Tax Treaty article 21(2)" on Page 2 Question J of the 1040NR-EZ.

If you are filing form 1040NR (the long form which few students ever need), enter the standard deduction on line 3 of schedule A. In the space to the left of line 3, write "Standard deduction allowed under US-India Tax Treaty." Also enter the amount on line 34 of form 1040NR.

By claiming the standard deduction, you cannot claim any itemized deductions.