US Tax Consultant in Hyderabad for NRIs

If you are a US citizen or green card holder, then yes, you need to file US taxes on your global income even after returning to India. It also includes the income you earned in India. It is because the IRS requires all its US citizens and green card holders to file federal tax returns on their worldwide income regardless of where they currently reside. Further, non-filing can lead to serious IRS penalties, interest accumulation, and in extreme cases, criminal prosecution and passport revocation. 

The India-USA Double Tax Avoidance Agreement (DTAA) is a bilateral tax treaty that helps US and Indian taxpayers avoid paying tax on the same income twice in both India and the US. Considering this, for US-based NRIs living in Hyderabad, the DTAA allows them to claim a Foreign Tax Credit (Form 1116) on their US tax return for already paid taxes in India. It significantly helps taxpayers of both countries in reducing their tax obligation. It is beneficial for US-based NRIs with Indian salary income, capital gains from property sales, or rental income. Savetaxs actively optimizes available DTAA benefit for each US-based NRI client living in Hyderabad. 

FBAR, or the Foreign Bank Account Report (FinCEN 114), is a mandatory annual disclosure filed with the US Treasury Department. If you are a US citizen or green card holder living in Hyderabad. Additionally, if your Indian bank accounts total, including NRE savings, NRO, or fixed deposit accounts, are more than USD 10,000 at any point during the calendar year, you are liable to file FBAR. The date to file the form is April 15, with an automatic extension till October 15. Further, non-willful violations result in penalties of USD 10,000 per violation, and willful violations attract penalties of USD 100,000 or 50% of the account balance, whichever is more. 

If you have missed your FBAR filings for previous years, the IRS Streamlined Filing Compliance Procedures allow you to catch up on all missed filings without facing heavy standard penalties. However, the non-compliance should be non-willful and unintentional. There are two options available under this: Streamlined Domestic Offshore Procedures (SDOP) and Streamlined Foreign Offshore Procedure (SFOP). The option you choose depends on your residency situation. Further, Savetaxs has successfully helped out many US-based NRIs through the streamlined procedure and helped them achieve IRS compliance safely. 

This is a very complex and common issue for US-returned NRIs living in Hyderabad. This is because RSUs (Restricted Stock Units) and ESOPs (Employee Stock Option Plans) from US companies are generally taxable in both India and the USA. It creates a dual reporting obligation for them. Considering this, in the US, RSUs vesting is treated as ordinary income that is reported on Form 1040, while subsequent sale gains from it are treated as capital gains. Here, the DTAA provision can reduce the double taxation impact. To help you out in this complex situation, Savetaxs offers complete RSU and ESOP tax planning, US reporting, and Indian ITR coordination.