The US asks more of NRIs than most countries do. It taxes its residents on worldwide income, it wants to know about every foreign account you hold, and it treats many Indian investments harshly. None of that is a reason to cut ties with India, but it does mean reporting carefully.
Tax in two countries
The US tax year is the calendar year, and returns are due on 15 April, or 15 October if you file for an extension. India’s financial year runs from April to March, and most NRIs’ Indian returns are due on 31 July. The mismatch matters when you claim credit in one country for tax paid in the other.
As a US resident, you report your Indian income on your US return: rent, interest on NRO deposits, capital gains, and interest on NRE deposits too, even though India does not tax it. The India-US tax treaty lets you credit Indian tax against the US bill. Our
US tax calculator
estimates your position.
The reporting rules that catch people
- FBAR. If your foreign accounts together exceed USD 10,000 at any point in the year, you file FinCEN Form 114. NRE, NRO and fixed deposit accounts all count.
- Form 8938. Living in the US, you report foreign financial assets on your return if they exceed USD 50,000 at the end of the year or USD 75,000 at any point (USD 100,000 and USD 150,000 for a married couple filing jointly).
- Gifts. Giving any one person other than your spouse more than USD 19,000 in 2026 means filing Form 709, even when the recipient is a parent.
Missing these filings can bring penalties even when no tax is owed. Our
guide to sending money from the US
explains each one.
Investing in India from the US
Indian mutual funds are usually treated as PFICs by the IRS, which makes them expensive to hold and complicated to report. Many Indian fund houses also refuse US-resident investors because of FATCA paperwork. Check our
AMC eligibility checker
before you invest, and speak to a cross-border tax adviser about anything you already hold.
On the US side, put enough into a 401(k) to collect any employer match before anything else.
Banking and sending money home
Convert your Indian resident account to NRO once you become an NRI, and use an NRE account for money you send from the US. Our
NRI banking guide
explains the difference. Providers compete hard on the USD-INR corridor, so compare the rupees your family will actually receive on our
INR converter
before each transfer.
Saving money in the US
Figures are as of September 2026.
- Health savings account. With a high-deductible health plan you can put USD 4,400 (self-only cover) or USD 8,750 (family) into an HSA in 2026. Contributions are deductible, growth is untaxed and withdrawals for medical costs are tax-free in the US. India does not recognise the account, so take advice before drawing on it after a move back.
- Retirement accounts if you move back. India taxes residents on growth inside foreign retirement accounts, but section 89A lets you defer the Indian tax on a 401(k) or IRA until you withdraw, which is when the US taxes it. You claim the deferral on Form 10-EE before filing your Indian return. The US, the UK and Canada are the only countries notified for it.
- Existing PPF accounts. You cannot open a new PPF account as an NRI, and one you already hold is less tax-efficient than it looks: India exempts the interest, but the US does not recognise PPF, so the interest belongs on your US return each year.
- Cards on trips home. Many US cards add a 3% foreign transaction fee; many travel cards charge none. Use one of those in India, and pay in rupees when a card machine offers dollars.
- A US credit history. Your Indian credit history does not follow you. A secured card, used lightly and paid off in full each month, is the usual way to build a US score from nothing.
- Global Entry. Green card holders can apply for Global Entry, which costs USD 120 for five years and includes TSA PreCheck.
