Your Guide to Filing US Expat Taxes in India

Living in India as a US expat is an adventure—rich in culture, diverse landscapes, and exciting opportunities. Whether you’re drawn to bustling cities, serene beaches, or the beauty of the Himalayas, India offers an incredible expat experience. But while you embrace your new lifestyle, you’ll still need to manage your US tax obligations. The good news? With the right knowledge, filing your taxes doesn’t have to be stressful. This guide will help you navigate US expat taxes in India smoothly, covering everything from filing requirements to tax-saving benefits for expats. With a little planning and our US-India Expat Tax Guide, you can enjoy all that India has to offer—without worrying about tax season.

Topics covered in the US-India Expat Tax Guide:

Do I Need to File US Taxes?

US Tax Deadlines

Moving to India

Immigration & Tax Compliance in India

US-India Tax Treaty

US Tax Benefits for US Expats Living in India

Self Employment in India

Investing in India as a US Expat

Simplify Your Taxes with MyExpatTaxes

Do I Need to File US Taxes?

If you’re a US citizen or green card holder, you’ll need to file a US tax return every year—no matter where you live–if your income exceeds the IRS threshold. That’s right, the US taxes based on citizenship, not residency, so even if you haven’t set foot in the US for years, you may still be liable.

The IRS filing thresholds vary according to your filing status. In 2025, you’ll need to file your 2024 US taxes if you are:

Filing Status	Income Threshold
Single	$14,600
Married Filing Jointly	$29,200
Married Filing Separately	$5
Head of Household	$21,900
Qualifying Widow(er)	$29,200
Self-Employed*	$400

*Regardless of filing status, if you are self-employed with more than $400 of net self-employment income.

Tax Tip: If you’re an expat in India married to a non-US citizen, you’ll likely want to file as “Married Filing Separately” to keep your partner’s details separate from the IRS. This means you must submit a US tax return from India if your income exceeds just $5!

Read more about the Tax Filing Thresholds for US Expats.

Additional Reporting Requirements

Foreign Bank Account Report (FBAR)– If you have more than $10,000 combined among your foreign accounts at any time during the year, you’ll need to report them to the US Treasury.

Foreign Account Tax Compliance Act (FATCA) – You’ll need to report all foreign accounts and assets to the IRS if your maximum combined balance is over a certain threshold (starting at $200,000 for single filers).

Passive Foreign Investment Company (PFIC) – If you own Indian mutual funds, pensions, or certain life insurance policies, you may need to file Form 8621.

These are some of the most common reporting requirements and it may seem that the requirements to stay IRS compliant are a little daunting, but you don’t need to know all the in-and-outs. Simply fill in our questionnaire, and the MyExpatTaxes software will automatically fill in all the forms necessary for your situation.

US Tax Deadlines for Expats

So you know that you probably need to file your US taxes, but when? Luckily, US expats get an automatic extension and you can request another extension if you need a bit more time.

Standard Filing Deadline	April 15th
Automatic Extension for Expats	June 16th
Deadline for Expats Filing an Extension (file by June 15th)	October 15th
FBAR Deadline for Expats	October 15th
Deadline for Expats if you Filed a Second Extension	December 15th

Note that if a deadline falls on a weekend or holiday, it automatically moves to the next business day, along with any related extensions.

First-Time Filers – Streamlined Procedure

If you’ve never filed US taxes while living in India, the Streamlined Procedure can help you catch up without penalties. This program is designed for expats who didn’t know they had to file and now want to fix their tax situation. You can become tax compliant by filing just three years of overdue tax returns and six years of FBARs as long as you can provide a written explanation stating that your failure to file was non-willful.

The biggest benefit of this program is penalty relief. Normally, failing to file can lead to huge fines, but this program waives those penalties. You also won’t face failure-to-file or failure-to-pay penalties as long as you use the procedure before the IRS contacts you. That’s right, if the IRS comes knocking before you take action, you’ll lose that advantage and potentially face major financial consequences.

Moving to India

Moving to India presents a unique blend of opportunities and challenges. Here’s are some of the key aspects to consider.

Healthcare and Insurance

Securing comprehensive health insurance is crucial when relocating to India. As an expatriate, you won’t be eligible for India’s public healthcare system, which primarily serves the local population. Therefore, obtaining international private health insurance is essential to ensure access to quality medical services. India boasts some of Asia’s top private hospitals, attracting medical tourists from the US and beyond.

Additionally, it’s advisable to familiarize yourself with local healthcare facilities and identify reputable hospitals and clinics in your area. Regular health check-ups and vaccinations should also be part of your healthcare routine to prevent common tropical diseases.

Cultural Integration

Embracing India’s rich cultural diversity can be both exciting and challenging. Demonstrating respect for local customs, dressing modestly, and being open to diverse culinary flavors can facilitate smoother integration into Indian society. Engaging with local communities and participating in cultural events can also enrich your understanding and appreciation of India’s traditions.

In major cities like Mumbai, Delhi, and Bangalore, English is widely spoken, especially in business and expat circles. However, knowing some Hindi (or the regional language, like Tamil in Chennai or Kannada in Bangalore) can make everyday interactions easier and help you connect with locals on a deeper level.

While the warmth and hospitality of locals can make you feel welcome, cultural differences—such as indirect communication styles, different concepts of personal space, and occasional bureaucratic hurdles—can take time to adjust to. Traffic congestion, pollution, and noise levels in major cities might also be overwhelming at first. However, by keeping an open mind, learning a few local phrases, and engaging with the community, you’ll find that India offers a deeply rewarding and enriching experience. Over time, the challenges become part of the adventure, making your integration into Indian society all the more meaningful.

Safety and Security

It’s important to remain vigilant about safety and review the US Department of State travel advisory before booking to visit. Stay informed about local conditions, avoid high-risk areas, and exercise caution, especially during national or religious events. Be mindful of your belongings on buses, trains, and in crowded areas, and exercise caution in tourist hotspots, as scammers, pickpockets, and ticket touts often target foreigners. Keeping copies of important documents and being aware of local emergency contacts can enhance your personal security. Utilizing reliable transportation options and staying connected with local expatriate communities can also contribute to a safer experience.

Immigration & Tax Compliance in India for US Expats

Indian Visas

All US citizens require a valid passport and an appropriate visa to enter India. The passport should have at least six months’ validity and two blank pages. India offers various types of visa, including tourist, business, and employment visas. India has no specific retirement visa for US citizens but there are several visas that will allow you to stay for extended periods. The visa is valid for 10 years for US citizens, or you can use an e-tourist visa, which varies in validity.

Once you stay in India for a continuous period of 6 months, consider applying for an Overseas Citizen of India (OCI) card, which grants multiple entry, multi-purpose lifelong visa privileges.

Tax Residency and Deadlines

In India, your tax liability depends on your residency status. You’re considered a tax resident if you stay in India for 182 days or more during a tax year (April 1 to March 31) or you have stayed for 60 days or more in the financial year and 365 days or more in the preceding 4 financial years. Tax residents are subject to taxation on their global income, while non-residents are taxed only on income earned within India.

The deadline for filing tax returns is typically July 31 following the end of the tax year. It’s important to maintain accurate records of your income and stay updated on any changes in tax laws to ensure compliance. Consulting with a local tax advisor can provide personalized guidance based on your specific situation.

Income Tax Rates

India has a progressive tax system, meaning that tax rates increase as income rises. For residents and non-residents under 60 years of age, the income tax rates for FY 2025-26 start at 5% for incomes above ₹3,00,000 and go up to 30% for incomes above ₹15,00,000. A variety of deductions and exceptions are available. It’s advisable to consult with a local tax professional to optimize your tax planning strategies.

Social Security

Employees (including foreign nationals) working in an establishment in India that employs 20 or more persons are liable to contribute towards the provident fund at the fixed rate of 12% of your salary.

US-India Tax Treaty

The US-India Income Tax Treaty is designed to prevent double taxation of income earned by residents of the United States and India. However, a ‘Savings Clause‘ allows the US to tax its citizens as if the treaty had not come into effect, except for certain income types. Fortunately, you can use the Foreign Tax Credit or Foreign Earned Income Exclusion to offset the tax paid in India against your US liability.

For more details, see the official IRS India Tax Treaty PDF.

US Tax Benefits for Expats Living in India

Foreign Tax Credit (FTC)

If you pay income tax in India, you can use the Foreign Tax Credit (FTC) to lower your US tax bill. This credit lets you offset taxes paid to India against what you owe to the US.

How the Foreign Tax Credit Works:

• Eligibility: To qualify for the FTC, US expats are only required to have foreign income that has been taxed by a foreign country that is not sanctioned by the US–so India is fine!
• Calculation: Determine the total amount of foreign taxes paid and convert it into US dollars. This converted amount becomes the credit you can apply against your US taxes.
• Limitations: The credit you claim cannot exceed the amount of US tax attributable to your foreign income. In other words, you can’t claim more than your US tax liability.

One key benefit of the FTC is that it can apply to all types of income. If you earn investment income, rental income, or capital gains in India, the FTC can help. You can also carry unused FTC forward for ten years or back one year.

Foreign Earned Income Exclusion (FEIE)

If you’re living in India and earning foreign income, you may qualify for the Foreign Earned Income Exclusion (FEIE). This exclusion lets you exclude $126,500 your foreign-earned income from US taxation.

To use the FEIE, you must meet either the Physical Presence Test (by living outside the US for 330 full days in a consecutive 12-month period) or the Bona Fide Residence Test (by being a resident of India for an entire tax year).

You can only exclude earned income, like salaries, self-employment income, professional fees, or other amounts paid to you for personal services you have rendered. Passive income (like interest, dividends, and rental income) doesn’t qualify. If you exclude income under FEIE, you can’t claim the Foreign Tax Credit on that income.

Foreign Housing Exclusion

Living in India can come with extra housing costs, and the Foreign Housing Exclusion helps offset those expenses. If you qualify for the FEIE, you also qualify to exclude a portion of your housing costs.

Eligible expenses include rent, utilities, property insurance, furniture rental, and certain maintenance costs. This exclusion does not cover mortgage payments, home purchase costs, or improvements to the property. The maximum exclusion depends on your city. If you live in a high-cost city like Mumbai or Delhi, you may qualify for a higher housing cap.

Child Tax Credit (CTC)

If you have kids under age 17 and live in India, the Child Tax Credit (CTC) can reduce your US tax bill. You can get up to $2,000 per qualifying dependent. Of this amount, $1,700 is refundable, meaning you can get money back even if you don’t owe tax. Perfect if you’re planning a trip to a tree house resort in Kerala or a luxury stay in the Floating Palace of Udaipur!

To qualify, you need to meet the minimum earned income amount, and the credit is phased out if your income is above a certain limit. You can claim the Additional Child Tax Credit if you use the Foreign Tax Credit but not if you use the Foreign Earned Income Exclusion.

Self Employment in India

India’s growing economy and government support make it attractive for expat entrepreneurs.

Roughly 6/10 workers in India are self-employed and this number is steadily growing for locals and expats alike. There are no additional requirements for foreign nationals. The basic requirements are to register with Indian tax authorities and pay tax on your income. You’ll need a PAN card to register, and if your turnover is above a certain level, Goods and Services Tax (GST) registration is also required.

There is a growing community of digital nomads in India, with some states advocating for the introduction of a Digital Nomad visa. In the meantime, digital nomads can work remotely in India, with an alternative long-stay visa. Rules change, so check official sources before planning an extended stay.

India has implemented reforms to simplify company registration and compliance requirements, earning a ranking of 63/190 countries in the World Bank Ease of Doing Business Report. India supports foreign entrepreneurs through initiatives like Startup India (tax breaks and funding) and Make in India (foreign investment incentives).

Totalization Agreement

Since there is no totalization between US and India, self-employed individuals face double taxation on social security. This means that self-employed US citizens resident in India must pay US Social Security taxes along with Indian social security contributions.

Investing in India as a US Expat

Investing in India as a US expat offers great opportunities, but it comes with regulatory and tax considerations.

India has a growing economy, a strong stock market, and various investment options, including real estate, mutual funds, and fixed deposits. However, US tax laws, Indian regulations, and compliance with FATCA (Foreign Account Tax Compliance Act) can complicate things. Understanding these factors helps ensure a smooth investment experience.

Investment Options in India

Investing directly in India’s stock market is restricted for individual foreign investors. Exchange-traded funds (ETFs) listed in international markets offer a viable alternative. These ETFs provide a relatively straightforward pathway to participate in India’s economic growth without the complexities associated with direct investment.

For lower costs and easier tax reporting, many expats hold US-based stocks and bonds. Foreign mutual funds often trigger high fees and complicated tax rules, making US investments simpler and more cost-effective. If you have already invested in Indian or other foreign mutual funds, MyExpatTaxes makes reporting Passive Foreign Investment Companies (PFICs) as painless as possible.

Achieving your financial goals is just a few steps away with MyExpatInvest.com. Our service matches you with a financial consultant with international expertise to craft your personal investment and retirement strategy. The service includes management of US mutual or hedge funds and advice regarding Passive Foreign Corporation (PFIC) reporting exposure. The initial consultation is free and you’ll be matched with the best expert for your goals.

Retirement Accounts

You can still contribute up to $7,000 annually to a US Individual Retirement Account (IRA) while living in India. To be eligible to contribute, you’ll need to report your foreign wages or self-employment income and ensure it’s still taxable in the US. Income excluded with the FEIE is not considered taxable compensation.

Read More: IRA Contributions for Expats

Real Estate Investments

US expats who are resident in India can buy property in India provided they obtain the required approvals. Overseas Citizen of India (OCI) card holders can purchase residential and commercial properties in India but are not permitted to purchase agricultural land. Selling property may result in capital gains tax, with different rates for short-term and long-term holdings.

Investing in India can be profitable if you understand the regulations and tax obligations. Consult a financial advisor familiar with US and Indian tax laws to ensure compliance.

Simplify Your Taxes with MyExpatTaxes

Filing US taxes from India doesn’t have to be stressful or expensive! Our award-winning expat tax software makes it easy for you to stay compliant without the hassle. Whether you need to file for the first time or just want a smoother process, we’ve got all the forms and support you need.

You can test our software before you commit—no upfront payment required. Plus, our friendly customer service team is here to help if you have questions about FEIE, FTC, FATCA, or anything else related to US-India expat taxes.

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