I am an Indian but I currently live and employed in the US. I have a SSN and pay taxes in the US. Just to be sure, I should select 'yes' in the question that asks "For US Federal Tax purposes are you a US person"?
The tooltip on the website suggests otherwise and when I proceed to fill the application, it creates all sorts of confusions. Can someone please clarify this? Thanks in advance.
That's correct. "US person" is Washington talk for anyone subject to US taxes, and you are. (I assume, since you have an SSN, that you are not a student on a student visa and therefore prohibited from paid work.)
If you currently file a 1040 tax return, you will have to become acquainted with Schedule C, for self-employment income. If the amount is under $400, you can choose to include it as Other Income on page one of form 1040 (but not 1040A or 1040EZ, I don't think).