Once you are a US tax resident, the US taxes your worldwide income and requires you to report foreign accounts and assets. Your Indian residency status does not change that.
A US tax resident is a citizen, a green card holder, or an H-1B or L-1 worker who meets the substantial presence test.
What to report
| Item | US treatment | Form |
|---|---|---|
| Indian or UAE bank accounts (NRO, NRE, savings, fixed deposits) totaling over $10,000 at any time | Report every account; interest is taxable in the US even if tax-free in India (NRE) | FBAR (FinCEN 114); Schedule B |
| Foreign financial assets above $50,000 at year-end or $75,000 at any time (single, living in the US; double for joint filers) | Disclosure | Form 8938 |
| Indian mutual funds, ULIPs, many ETFs | Usually PFICs: punitive tax unless elections are made | Form 8621 |
| Rental property in India | Rent taxable; depreciation over 30 years (ADS) | Schedule E + Form 1116 |
| Sale of Indian property or shares | Capital gain in both countries; credit for Indian tax | Schedule D + Form 1116 |
| PPF, EPF, NPS | Treatment is debated; growth may be taxable | Often Form 8938 / 3520 analysis |
| Inheritance from parents abroad | Not taxable; reportable over $100,000 | Form 3520 |
Avoiding double tax
- India: the US-India treaty and the foreign tax credit (Form 1116) let you offset Indian tax, including 30%+ TDS on NRO interest, against US tax on the same income. Claim excess TDS back in India by filing an ITR.
- UAE: there is no income tax treaty, but UAE income is usually untaxed locally, so the full US tax generally applies.
Missed filings? You have options
If you did not know about FBAR or Form 8938, the IRS Streamlined Domestic Offshore Procedures usually let non-willful taxpayers catch up with three years of amended returns, six years of FBARs and a 5% penalty, far lower than standard penalties. If all income was reported and only forms were missed, a delinquent FBAR or international information return submission may carry no penalty.
How VG CPA PC helps
FBAR and Form 8938 filing, PFIC calculations, Indian rental and property-sale reporting, foreign tax credits, and Streamlined (SDOP) catch-up filings.
Talk to an advisorFrequently asked questions
I am on H-1B. Do I need to report my Indian bank accounts?
Yes, once you are a US tax resident. File an FBAR if your foreign accounts total over $10,000 at any time, and Form 8938 if you pass its thresholds.
Is NRE interest taxable in the US?
Yes. NRE interest is tax-free in India but taxable on your US return once you are a US resident.
Are Indian mutual funds a problem for US taxpayers?
Usually yes. Most are PFICs, which carry high tax and Form 8621 filings. Review holdings before or soon after becoming a US resident.
I own a flat in India and rent it out. What do I report?
Report the rent on Schedule E, depreciate the building over 30 years, and claim Indian tax paid as a foreign tax credit.
Will I be taxed twice when I sell property in India?
Usually not. Indian capital gains tax can be credited against US tax on the same gain using Form 1116.
I live in the US and have a bank account in Dubai. What do I file?
An FBAR and possibly Form 8938. Interest is taxable in the US even though the UAE does not tax it.
I never filed FBAR. What should I do?
Talk to a CPA before filing anything. Non-willful taxpayers can often use the Streamlined Domestic Offshore Procedures with a 5% penalty, or file delinquent FBARs with no penalty if all income was reported.
Do I owe US tax on an inheritance from my parents in India?
No. Inheritances from foreign persons are not taxable, but amounts over $100,000 are reported on Form 3520.
Updated November 2026. General information based on US federal tax law as of November 2026, not legal, immigration or Indian tax advice for your situation. Indian (FEMA, RBI, income tax) points should be confirmed with your Chartered Accountant in India. Please speak with an advisor before acting.