# US Tax for Americans & Green-Card Holders in India

> US citizens and green-card holders are taxed by the US on worldwide income wherever they live, so living in India means filing both an Indian ITR and a US Form 1040. Double tax is relieved through the foreign tax credit (Form 1116) or the foreign earned income exclusion. Indian bank accounts trigger FBAR and often Form 8938, and Indian mutual funds are PFICs for US persons — with Form 8621 and punitive tax unless planned for.

Practice: US Tax Services — https://www.industax.com/services/us-tax/

Indian tax years run April–March while US years are calendar years, so credits must be matched carefully. Indian salary, rent and capital gains usually generate enough Indian tax to offset US tax, but PFICs and the net investment income tax can still leave US liability.

We prepare both returns together, choose between FTC and FEIE, file FBAR and 8938, and advise on restructuring Indian investments to avoid PFIC problems.

## Key facts

| Item | Detail |
| --- | --- |
| US taxation | Worldwide income, any country of residence |
| Relief | Foreign tax credit (Form 1116) or FEIE (Form 2555) |
| Indian accounts | FBAR above USD 10,000 aggregate |
| Indian mutual funds | PFIC — Form 8621 |
| Due date abroad | Automatic extension to 15 June |

## Who needs this

- US citizens living in India
- Green-card holders who moved to India
- OCI cardholders with US citizenship

## What's included

- Form 1040 with FTC/FEIE
- FBAR and Form 8938
- PFIC analysis
- Indian ITR coordination

## Documents

- Indian Form 16 and ITR
- Bank and investment statements
- Prior US returns

## Process

1. **Map** — Income and accounts in both countries.
2. **Prepare** — US and Indian returns together.
3. **Report** — FBAR, 8938 and 8621 filed.

Work that legally requires a US enrolled agent or CPA is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Do I have to pay US tax if I pay Indian tax?

Often little or none, because Indian tax is credited against US tax on the same income. But some items — PFIC income, certain US-source income — can still create US tax.

### Why are Indian mutual funds a problem for Americans?

Non-US mutual funds are Passive Foreign Investment Companies under US law. Without special elections, gains are taxed at the highest rate with interest charges, and each fund needs Form 8621.

### Does a green card holder in India have to file US taxes?

Yes, as long as the green card hasn't been formally surrendered or deemed abandoned for tax purposes. Giving it up can have expatriation tax consequences for long-term residents.

## Official sources

- IRS — Internal Revenue Service: https://www.irs.gov/
- FinCEN — BSA E-Filing (FBAR): https://bsaefiling.fincen.treas.gov/

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Canonical page: https://www.industax.com/services/us-tax/us-citizens-green-card-holders-in-india
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.