US citizens and Green Card holders must keep filing US taxes even after moving assets or income through India — here’s what that actually involves.
Quick Summary
- US citizens/Green Card holders file Form 1040 annually regardless of where they live.
- Foreign financial accounts (including Indian NRE/NRO/FD accounts) may trigger FBAR (FinCEN 114) and FATCA (Form 8938) reporting if balances exceed applicable thresholds.
- Indian mutual funds are typically treated as PFICs (Passive Foreign Investment Companies) under US tax law, with distinct and often unfavorable reporting rules.
- The Foreign Tax Credit (Form 1116) and DTAA provisions help offset double taxation between India and the US — this needs coordinated filing on both sides.
Common NRI Filing Triggers
| Situation | US Filing Implication |
|---|---|
| Indian NRE/NRO account balance above threshold | FBAR reporting required |
| Holding Indian mutual funds | PFIC reporting (Form 8621), often complex |
| Selling Indian property | Capital gains reportable in the US, foreign tax credit may apply |
| Missed past filings | Streamlined Domestic/Foreign Offshore Procedures may apply to catch up |
Common Mistakes
- Assuming Indian tax paid automatically offsets US tax owed without properly claiming the Foreign Tax Credit.
- Not reporting Indian mutual funds as PFICs, which can trigger significant penalties if discovered later.
- Missing FBAR filing because Indian account balances weren’t tracked against the threshold.
FAQs
Do I need to file US taxes if I live in India full-time?
Yes, US citizens and Green Card holders file regardless of residence, though foreign income exclusions and tax credits may reduce what’s owed.
What if I missed several years of FBAR filing?
Catch-up procedures exist, generally with more favorable terms if you come forward before being contacted by tax authorities — this is a specialist area worth engaging a qualified CPA for.
Related Services
NRI Tax Services in India | Financial Investment Options | EPF Withdrawal
Get Help
This overview is general guidance, not a substitute for advice from a licensed CPA on your specific US filing position. Talk to us about coordinating your India-side documentation.