# India Tax Desk for NRIs in the USA

> NRIs living in the US pay Indian tax only on Indian income — rent, NRO interest, capital gains on Indian property and shares — and file an Indian ITR where required. The US taxes its residents on worldwide income, so the same Indian income goes on the US return with credit for Indian tax. Two US-side traps catch most NRIs: Indian mutual funds are PFICs with punitive US tax, and Indian accounts above USD 10,000 in total require an FBAR.

Practice: Country Tax Desks for NRIs — https://www.industax.com/services/country-tax/

Typical work: claiming refunds of excess TDS on NRO interest and property sales, lower deduction certificates before selling property, choosing the right residency status for the year of moving, and making sure the US and Indian returns use consistent numbers.

We prepare the Indian return and coordinate with your US preparer — or our partner US enrolled agents — on credits, FBAR and PFIC reporting.

## Key facts

| Item | Detail |
| --- | --- |
| India taxes | Indian income only (as NRI) |
| US taxes | Worldwide income of US residents |
| Double tax relief | Foreign tax credit in the US for Indian tax |
| US traps | PFIC (Indian MFs), FBAR, Form 8938 |
| Treaty rates | Dividends 25%/15%; interest 15%/10% |

## Who needs this

- H-1B and L-1 professionals
- Green-card holders and US citizens with Indian income
- NRIs selling property in India

## What's included

- Indian ITR
- TDS refund and lower deduction certificate
- US coordination
- PFIC and FBAR guidance

## Documents

- Form 26AS/AIS
- NRO/NRE statements
- Property and investment documents
- US tax return (for credit matching)

## Process

1. **Review** — Indian income and US position.
2. **File** — Indian ITR with refunds and credits.
3. **Align** — US reporting matched.

## FAQs

### Should NRIs in the US keep Indian mutual funds?

From a US tax angle, Indian mutual funds are PFICs and can be very expensive to hold. Many US-resident NRIs switch to direct Indian equities or US-listed India funds after advice on Indian capital gains tax.

### Is NRE interest taxable in the US?

Yes. NRE interest is tax-free in India for NRIs but taxable on the US return for US residents.

### Do I need to file an Indian ITR if TDS was deducted?

Often yes — to claim a refund if TDS exceeds your tax, to carry forward losses, or if income exceeds the basic exemption limit.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/
- IRS: https://www.irs.gov/

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Canonical page: https://www.industax.com/services/country-tax/nri-tax-usa
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.