Indian income, US residency, two tax systems that both want a piece — and five-figure penalties for forms most people have never heard of. The complete map for NRIs and Indians in the US.
If you live in the US and have any financial life left in India — NRE/NRO accounts, mutual funds, property, rent from a flat in Bangalore — you're operating in two tax systems at once. The income tax part is manageable. The disclosure part is where lives get ruined, because the penalties aren't for unpaid tax — they're for unfiled paper.
The US taxes its tax residents on worldwide income. You're a tax resident if you hold a green card, or pass the substantial presence test — roughly 183 weighted days across three years (this year's days + 1/3 of last year's + 1/6 of the year before). H-1B, L-1, and most work-visa holders become residents quickly. F-1 students are exempt from the count for five calendar years, which is why students often file as nonresidents while their H-1B colleagues can't.
Once resident: your Indian salary history doesn't matter, but every rupee of current Indian income — NRO interest, mutual fund gains, rent, dividends — belongs on your US return, converted to dollars.
Thousands of NRIs discover FBAR years late. The IRS's Streamlined Filing Compliance Procedures exist exactly for this: refile 3 years of returns, 6 years of FBARs, certify the failure was non-willful, and penalties drop to zero (for those abroad) or 5% (domestic) — versus the catastrophic default. Quiet disclosure (just starting to file 'from now on') is the tempting wrong answer that forfeits the program's protection.
This is our home turf — cross-border India-US filings are a Taxagon specialty. If any item above made your stomach drop, a 30-minute call will tell you exactly where you stand.
This guide is the hub — each of these covers one specific situation in detail:
Talk it through with a licensed US tax professional — we'll tell you honestly whether it applies to your situation.
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