American Expats in India

Updated on August 20, 2025.

India & U.S. Tax Timeline: Critical Dates for Dual Filers

Managing dual tax obligations between India and the United States requires careful attention to two distinct tax calendars. Understanding these timelines is crucial for maintaining compliance and avoiding penalties in both jurisdictions.

The Indian tax system operates on a Financial Year basis (April 1 to March 31), creating a significant timing difference with the U.S. calendar year system. For salaried employees, Tax Deducted at Source (TDS) is withheld monthly by employers. Self-employed individuals and those with significant non-salary income must make quarterly advance tax payments based on estimated annual income. These advance payments follow a prescribed schedule of 15%, 45%, 75%, and 100% of total tax liability, creating a continuous cycle of tax obligations that must be carefully managed alongside U.S. requirements.

Strategic Payment Planning to Avoid U.S. Penalties

The most critical aspect of dual tax compliance for U.S. expats in India is understanding that the June 15 automatic extension applies only to filing, not to payment obligations. This distinction has significant financial implications that require proactive planning to avoid unnecessary interest and penalties.

To effectively manage this payment timing challenge, expats should implement a multi-pronged approach. First, conduct a preliminary tax calculation by early March using your Indian income documentation and estimated U.S. tax obligations. This projection doesn't need to be perfect but should provide a reasonable estimate of your U.S. tax liability. Consider working with a tax professional familiar with both systems to ensure accuracy in this crucial calculation. As an expat CPA firm, we can help you with these items.

Second, establish a tax reserve account specifically for U.S. obligations. Since Indian taxes are paid through TDS withholding and quarterly advance payments throughout the year, you'll need separate liquidity for U.S. payments. Many expats find it helpful to set aside funds monthly, treating U.S. tax reserves as a fixed expense in their budget. This approach prevents the April 15 payment deadline from creating a cash flow crisis.

Third, leverage safe harbor provisions to minimize penalties. If you're unable to calculate your exact tax liability by April 15, you can avoid penalties by paying either 100% of your prior year's tax liability (110% if your prior year AGI exceeded $150,000) or 90% of the current year's tax. This safe harbor payment strategy provides protection while you finalize your actual tax calculations. As an expat CPA firm, we can help you with this.

For those with irregular income or significant Indian-source income, consider making quarterly estimated tax payments to the IRS. While India handles tax through TDS withholding and advance payments, the U.S. system may require quarterly payments if your withholding is insufficient. These payments are due April 15, June 15, September 15, and January 15, and help spread the tax burden throughout the year rather than facing a large payment in April.

Currency fluctuations between the rupee and dollar add another layer of complexity to payment planning. Since you'll likely earn income in rupees but owe taxes in dollars, exchange rate movements can significantly impact your tax liability. Consider using the yearly average exchange rate for income reporting (as permitted by the IRS) to smooth out volatility, and monitor exchange rates when planning your April payment to optimize the conversion timing. As an expat CPA firm, we can help you with these items.

India vs. U.S. Tax Systems: Direct Comparison

Understanding the fundamental differences between Indian and U.S. tax systems is essential for effective tax planning as an American expat. While both countries tax worldwide income for residents, their approaches to rates, deductions, and income classification vary significantly.

The Indian progressive tax system applies rates ranging from nil on income up to ₹2.5 lakh (under old regime) to 30% on income exceeding ₹10 lakh, with additional surcharge up to 37% for highest earners and 4% health and education cess. India also offers a new tax regime with lower rates but fewer deductions. This compares to U.S. federal rates ranging from 10% to 37%, though U.S. expats may benefit from the Foreign Earned Income Exclusion (FEIE) of $120,000 for 2023 and $126,500 for 2024.

One crucial difference lies in the treatment of investment income. India applies different rates for capital gains based on asset type and holding period - equity gains over one year face 10% tax (above ₹1 lakh exemption), while debt fund gains are taxed at slab rates. The U.S., conversely, distinguishes between short-term gains (taxed as ordinary income) and long-term gains (taxed at preferential rates of 0%, 15%, or 20% depending on income levels). This difference can significantly impact investment strategy for expats managing portfolios across both countries.

The Indian Tax System Explained in Detail

The Indian tax system presents unique complexities for American expats accustomed to U.S. tax principles. India's approach to income classification, taxation methods, and available deductions differs substantially from the American system, requiring careful study to optimize tax positions and ensure compliance.

Understanding U.S. Income Classifications

Before diving into the Indian system, it's essential to understand how the United States classifies and taxes different types of income, as this provides the framework for comparison and planning strategies.

The Indian Income Tax Categories

India categorizes income into five distinct heads of income, each with specific rules and tax treatment. This categorical approach differs fundamentally from the U.S. system and requires careful analysis to properly report income and claim applicable benefits.

1. Income from Salaries

This category encompasses all compensation from employment relationships, including basic salary, allowances, perquisites, and retirement benefits. India provides standard deductions of ₹50,000 and professional tax deductions. House Rent Allowance (HRA) receives partial exemption based on complex calculations involving actual rent paid, salary levels, and city classification. Leave Travel Allowance (LTA) for domestic travel enjoys exemption twice in four-year blocks.

2. Income from House Property

Rental income from Indian property faces taxation after allowing standard deduction of 30% for repairs and maintenance, regardless of actual expenses. Municipal taxes paid and home loan interest up to ₹2 lakh (for self-occupied property) or unlimited (for let-out property) remain deductible. Self-occupied property generates nil income, though interest deduction still applies. The system allows setting off house property losses against other income heads.

For NRIs, rental income faces 30% TDS withholding, requiring careful cash flow planning. Property jointly owned requires income splitting based on ownership shares. The deemed let-out value provision for second homes creates tax liability even without rental income.

3. Income from Business or Profession

Business income covers earnings from commercial activities, while professional income includes independent practice earnings. India offers presumptive taxation schemes - 8% of gross receipts for eligible businesses (6% for digital receipts) under Section 44AD, and 50% of gross receipts for professionals under Section 44ADA. These schemes simplify compliance for smaller operations while potentially reducing tax liability.

Regular business taxation allows full deduction of business expenses, depreciation per prescribed rates, and carry forward of losses for eight years. GST registration requirements apply based on turnover thresholds. The distinction between speculative and non-speculative business income affects loss set-off provisions.

4. Income from Capital Gains

India's capital gains taxation distinguishes between short-term and long-term holdings, with varying periods for different assets. Equity shares and equity mutual funds held over 12 months qualify for long-term treatment at 10% (gains exceeding ₹1 lakh), while debt funds and real estate require 24-month holding for long-term classification.

Listed equity short-term gains face 15% tax, while other short-term gains are taxed at slab rates. Long-term gains on property and gold benefit from indexation, adjusting purchase price for inflation before calculating gains. Securities Transaction Tax (STT) paid reduces tax liability. Capital losses can be carried forward for eight years but can only offset capital gains, not other income.

5. Income from Other Sources

This residual category captures income not classified under other heads, including interest income from deposits, dividend income (taxable in recipient's hands since April 2020), lottery and gambling winnings (30% tax), gifts exceeding ₹50,000 (unless from relatives), and income from subletting property. Family pension receives standard deduction of ₹15,000 or one-third of pension, whichever is lower.

Interest income faces TDS at 10% for residents if exceeding ₹40,000 (₹50,000 for senior citizens). Dividend income exceeding ₹5,000 attracts 10% TDS. Systematic Investment Plan (SIP) redemptions require careful FIFO tracking for capital gains calculation.

Indian Taxes and Foreign Tax Credit Eligibility

Understanding which Indian taxes can be claimed as a credit on Form 1116 is crucial for reducing your U.S. tax liability. While most income taxes are creditable, social security contributions and certain other taxes are not.

ITR Forms and Form 16: Understanding India's Tax Documentation

For American expats, navigating India's tax system means becoming familiar with two key concepts: ITR Forms and Form 16. These are central to the process of filing your Indian tax return and documenting your tax withholdings.

What are ITR Forms?

ITR (Income Tax Return) Forms are India's official tax return forms. Different forms apply based on income sources and residential status. ITR-1 (Sahaj) is for salaried individuals with income up to ₹50 lakh, ITR-2 for individuals with capital gains or foreign income, ITR-3 for business income, and ITR-4 for presumptive taxation. Most U.S. expats file ITR-2 due to foreign asset reporting requirements. Think of these as India's equivalent to Form 1040, but with multiple versions based on income type.

What is Form 16?

The Form 16 is your annual TDS (Tax Deducted at Source) certificate from your employer. After the financial year ends on March 31, employers must issue Form 16 by June 15. It's the official proof of tax withheld from your salary. Form 16 consists of two parts:

• Part A: Contains basic information including name, PAN, TAN of employer, and summary of tax deducted and deposited quarterly.
• Part B: Provides detailed salary breakup, deductions claimed under Chapter VI-A, and tax computation.
• This document shows gross salary, allowances, perquisites, deductions under Section 80C, 80D, etc.
• The tax deducted as per Form 16 should match your Form 26AS (tax credit statement).

Form 16 is a critical document for U.S. tax purposes, as it provides the official amount of Indian tax withheld that can be used to claim the Foreign Tax Credit on your U.S. Form 1040.

U.S.-India Totalization Agreement

The U.S. and India signed a Social Security Agreement (Totalization Agreement) in 2016, but it is not yet in force as it awaits ratification. Once effective, this agreement will provide significant benefits for workers moving between the two countries.

Currently, without the agreement in place, U.S. expats working in India may face dual social security obligations. Americans employed by U.S. companies in India continue paying U.S. Social Security and Medicare taxes. Those employed by Indian companies contribute to the Employees' Provident Fund (EPF) at 12% of basic salary, with matching employer contributions. Self-employed Americans in India remain subject to U.S. self-employment tax unless structured through a foreign corporation.

Once the totalization agreement becomes effective, it will eliminate dual coverage for temporary assignments (typically up to 5 years), allow combining credits from both countries to qualify for benefits, and provide certificate of coverage to exempt workers from host country contributions. The agreement will cover retirement, disability, and survivor benefits but not healthcare programs.

Indian Social Security and Retirement System

Three-Tier System Overview

India's retirement system comprises multiple schemes:

• Employees' Provident Fund (EPF): Mandatory for organizations with 20+ employees. Contributions are 12% each from employer and employee on basic salary plus DA. The scheme provides retirement corpus, partial withdrawals for specific purposes, and pension through EPS.
• Public Provident Fund (PPF): Voluntary long-term savings with 15-year lock-in, tax-free returns (currently 7.1%), and annual contribution limit of ₹1.5 lakh. Popular for tax-saving under Section 80C.
• National Pension System (NPS): Market-linked retirement scheme with choices between equity, corporate bonds, and government securities. Tier I account has lock-in until 60, Tier II offers liquidity. Tax benefits up to ₹2 lakh under Sections 80CCD(1), 80CCD(1B), and 80CCD(2).

Indian Retirement Accounts and U.S. Tax Treatment

The U.S. tax treatment of Indian retirement accounts is complex and varies significantly by account type. The IRS generally doesn't recognize Indian retirement plans as "qualified," leading to potential current taxation and reporting requirements.

PFIC Mitigation Strategies for Indian Investment Accounts

A Passive Foreign Investment Company (PFIC) is a foreign corporation meeting specific income or asset tests. Most Indian mutual funds fall into this category, creating complex U.S. tax consequences. Understanding and managing PFIC exposure is crucial for U.S. expats investing in India.

Identifying PFICs in Indian Investments

• All Indian mutual funds (equity, debt, hybrid) are typically PFICs.
• Indian ETFs and index funds are PFICs.
• Unit-linked insurance plans (ULIPs) with investment components may contain PFICs.
• Portfolio Management Services (PMS) investing in funds create PFIC exposure.

Compliance Options

Since Qualified Electing Fund (QEF) elections are virtually impossible with Indian funds:

• Mark-to-Market Election: Most practical for publicly traded funds. Requires annual gain/loss recognition based on year-end NAV.
• Default Method: Excess distribution regime with punitive interest charges on gains.
• Avoidance Strategy: Invest directly in stocks rather than through funds.

Documentation Requirements

Maintain comprehensive records including:

• Monthly/quarterly fund statements showing NAV.
• Transaction records for all purchases and redemptions.
• Systematic Investment Plan (SIP) details with each installment date and amount.
• Annual consolidated statements from depositories (NSDL/CDSL).

Indian Financial Account Reporting Requirements

U.S. citizens and residents must report Indian financial accounts exceeding certain thresholds, with severe penalties for non-compliance.

FBAR and FATCA Reporting

Accounts requiring reporting include:

• Bank Accounts: Savings, current, fixed deposits, recurring deposits.
• Investment Accounts: Demat accounts, trading accounts, mutual fund folios.
• Retirement Accounts: EPF, PPF, NPS accounts.
• Insurance Products: Policies with surrender value like endowment plans, ULIPs.
• Digital Wallets: If balance can exceed $10,000 equivalent.

Form 8938 Thresholds for U.S. Expats

Living abroad thresholds are higher than U.S. residents:

• Single/Married Filing Separately: $200,000 on year-end or $300,000 any time during year.
• Married Filing Jointly: $400,000 on year-end or $600,000 any time during year.

Indian Government Benefits and Their U.S. Tax Treatment

Understanding the U.S. tax treatment of Indian government schemes helps optimize benefits:

• LPG Subsidy: Direct benefit transfer for cooking gas not taxable for U.S. purposes.
• Pradhan Mantri Jan Dhan Yojana: Basic banking benefits not reportable income.
• Atal Pension Yojana: Government co-contributions may be taxable; pension distributions definitely taxable.
• Sukanya Samriddhi Yojana: Interest earned is taxable annually for U.S. purposes despite Indian tax exemption.

Indian Business Structures and U.S. Reporting

Business structure selection significantly impacts U.S. tax compliance and reporting obligations.

Important Considerations

• Tax Treaty Benefits: Claim treaty benefits using Form 8833 when applicable.
• Exchange Rates: Use RBI reference rates or IRS yearly average rates for conversions.
• State PAN Requirements: Some states require separate PAN for tax withholding.
• Tax Residency Certificate: Obtain from IRS for claiming treaty benefits in India.

Indian Visa Options and Their Tax Implications

India offers various visa categories for American citizens, each with distinct requirements, benefits, and tax implications. Understanding these options is crucial for optimizing your tax position while ensuring legal residence status.

Employment Visa

The Employment Visa represents India's primary option for skilled professionals joining Indian companies or multinational subsidiaries. Requirements include employment with an Indian registered entity, minimum annual salary of $25,000 (sector-specific variations apply), bachelor's degree or five years relevant experience, and employer sponsorship with supporting documents. The visa provides initial one-year validity extendable up to five years, family dependent visas available, and no restrictions on domestic travel.

Tax implications include automatic tax residency after 182 days presence triggering worldwide income taxation. Employment income faces TDS withholding at applicable slab rates. Employer-provided accommodation creates taxable perquisite at 15% of salary or actual rent. Tax equalization agreements with employers may cover additional Indian tax burden. The visa enables EPF/pension contributions creating U.S. reporting obligations.

Business Visa

Business visas suit short-term commercial activities without Indian employment. Permitted activities include attending meetings and conferences, establishing business ventures, conducting tours and exhibitions, and recruiting personnel. The visa prohibits direct employment, receiving salary from Indian sources, and conducting journalism. Multiple-entry visas valid up to 10 years with 180-day continuous stay limits.

Business visitors avoid Indian tax residency if limiting stays under 182 days. Income from foreign sources remains non-taxable in India. However, frequent visits may trigger Permanent Establishment for foreign employers. Business development activities could create Indian-source income complications. Strategic planning of visit duration preserves non-resident status.

Project Visa

Project visas target foreign nationals executing specific projects in power, steel, and infrastructure sectors. Requirements include employment with foreign company having Indian project contract, letter from Indian project authority, and detailed project documentation. Visa duration matches project period with possible extensions.

Tax treatment follows employment visa with automatic withholding on Indian project income. Foreign company may face Indian Permanent Establishment taxation. Project completion bonuses attract 30% TDS for non-residents. Infrastructure project exemptions may apply under specific conditions. Careful structuring through offshore entities can optimize tax position.

Intern Visa

Intern visas accommodate foreign nationals pursuing internships with Indian organizations. Requirements include enrollment in foreign educational institution, internship with Indian company/NGO/university, and stipend not exceeding living expenses. Maximum duration of one year, non-extendable and non-convertible.

Modest stipends may fall below taxable thresholds (₹2.5 lakh annually). Educational institution tie-ups may provide treaty benefits. Avoid employment-like arrangements triggering full taxation. Maintain student status in home country for tax advantages. Document educational purpose for both countries' tax authorities.

Overseas Citizen of India (OCI)

OCI provides lifetime visa-free travel and residence rights for persons of Indian origin. Benefits include no registration requirements regardless of stay duration, parity with NRIs in economic/educational matters, and ability to purchase non-agricultural property. Restrictions include no voting rights, government employment, or agricultural land ownership.

OCI holders face same tax residency rules based on physical presence. Easier to maintain Indian financial accounts and investments. Property ownership simplified compared to other visa categories. Inheritance of property rights protected. Long-term tax planning benefits through maintained Indian connections.

E-Visa Categories

India's e-visa system offers five categories with online application process. E-Tourist visa allows 90-day stays with double entry. E-Business visa permits 180-day stays with multiple entries. E-Medical visa provides 60-day triple entry for treatment. E-Conference visa covers government/PSU organized events. E-Medical Attendant visa accompanies medical visa holders.

Short validity periods help avoid tax residency triggers. Electronic process simplifies compliance documentation. Limited to specific airports/seaports for entry/exit. Cannot be extended or converted in-country. Strategic for maintaining non-resident status while conducting Indian affairs.

India's Startup Visa and Digital Nomad Considerations

India has been developing frameworks to attract entrepreneurs and accommodate remote workers, though formal digital nomad visas remain under consideration. Current options provide pathways for innovative businesses and location-independent professionals.

Startup India Initiative

While not a specific visa, Startup India recognition provides benefits for foreign entrepreneurs. Eligibility requires incorporation as private limited company or LLP, annual turnover below ₹100 crores, working towards innovation/improvement of products/services, and certification from DPIIT. Benefits include tax holiday for three consecutive years, exemption from capital gains tax under certain conditions, self-certification for labor/environment laws, and faster patent application processing.

Foreign founders typically use Business or Employment visas while establishing operations. Company structure impacts U.S. tax reporting (Form 5471 for Pvt. Ltd.). Initial losses may not offset U.S. income due to entity classification. Consider "check-the-box" election for flow-through treatment. IP development location affects transfer pricing compliance.

Digital Nomad Tax Considerations

India lacks dedicated digital nomad visas, requiring creative visa solutions. Tourist visas prohibit work, even remote, risking deportation. Business visas allow meetings but not continuous remote work. Employment visas require Indian entity sponsorship. Some use multiple tourist entries, though technically non-compliant.

Remote workers spending 182+ days become Indian tax residents on worldwide income. Income from foreign employers may escape Indian tax if no Indian Permanent Establishment exists. Careful day-count management preserves non-resident status. Treaty tie-breaker rules may preserve foreign residence despite physical presence. Document foreign employment relationship and work location meticulously.

Practical Considerations for Remote Workers

Banking access improves with Aadhaar-based e-KYC for certain accounts, though full services require proper visa status. Many banks restrict NRO/NRE accounts to employment/business visa holders. Digital payment apps (UPI) increasingly accessible to foreigners. Cryptocurrency regulations remain fluid with 30% tax on gains plus 1% TDS.

Co-working spaces proliferate in major cities providing infrastructure. Short-term rentals available through various platforms without lease complications. SIM cards accessible with passport and visa documentation. Healthcare affordable but insurance recommended for catastrophic coverage. Time zone advantages for U.S. East Coast collaboration.

Frequently Asked Questions for U.S. Expats in India

Q: How does the U.S.-India tax treaty prevent double taxation?

The treaty provides multiple mechanisms to prevent double taxation. First, it assigns primary taxing rights - employment income is generally taxable where work is performed unless short-term assignment rules apply (less than 183 days, foreign employer, no Indian PE). U.S. government pensions taxable only in the U.S., while Indian government pensions taxable only in India. U.S. Social Security remains exclusively taxable in the U.S. Second, both countries provide foreign tax credits for taxes paid to the other country. Third, reduced withholding rates apply - 15% on dividends (25% without treaty), 10-15% on interest, and 10% on royalties. The treaty includes comprehensive tie-breaker rules for dual residence situations.

Q: Can I contribute to both Indian and U.S. retirement accounts?

Yes, with careful planning. Indian retirement contributions (EPF, PPF, NPS) follow Indian limits - EPF at 12% of basic salary, PPF up to ₹1.5 lakh annually, NPS additional ₹50,000 under 80CCD(1B). These provide Indian tax deductions but aren't recognized for U.S. tax purposes. U.S. retirement contributions (IRA, 401(k)) remain available if you have U.S.-source earned income or elect to include foreign earned income beyond FEIE limits. Indian retirement accounts may face U.S. taxation on annual accretions and require Forms 8938, 3520, and 3520-A reporting. Consider the pending totalization agreement's impact once effective.

Q: What happens to my U.S. state tax obligations when I move to India?

State tax obligations depend on your former state and departure steps. California, Virginia, New York, and New Mexico aggressively pursue former residents. Critical steps include obtaining Indian visa and FRRO registration, surrendering state driver's license, closing state bank accounts, updating voter registration to overseas status, and filing final part-year or non-resident returns. Some states continue taxing certain income like state pensions regardless of residence. States without income tax (Texas, Florida, Washington, Nevada) simplify expatriation. Document your Indian residence establishment thoroughly.

Q: How are Indian real estate investments taxed for U.S. expats?

Indian real estate faces multiple tax considerations. Rental income is taxed after 30% standard deduction and municipal taxes. Property sales within two years face short-term capital gains at slab rates; after two years, long-term gains at 20% with indexation benefit. Annual property tax varies by municipality. For U.S. purposes, report rental income on Schedule E with 27.5-year depreciation. Capital gains face U.S. tax regardless of Indian holding period, though foreign tax credits apply. Primary residence exclusion ($250,000/$500,000) potentially available if ownership and use tests met. Consider timing sales for optimal treatment in both countries.

Q: Should I choose the Foreign Earned Income Exclusion or Foreign Tax Credit?

For India's moderate tax environment, the choice depends on income level and type. FEIE benefits those with income under $126,500 who can eliminate or significantly reduce U.S. tax. However, India's lower tax rates compared to the U.S. may not generate sufficient foreign tax credits on excluded income. FTC preserves U.S. retirement account contribution eligibility and doesn't require physical presence or bona fide residence tests. Many expats benefit from combining both - using FEIE for earned income up to the limit and FTC for investment income and earnings above FEIE threshold. Model both scenarios considering your specific income composition.

Q: How do I handle Indian taxation of my U.S. investment accounts?

India taxes residents on worldwide income including U.S. investment gains. Interest and dividends from U.S. accounts face Indian tax at slab rates. Capital gains taxation depends on holding period and asset type. Report U.S. investment income in Indian returns under "Income from Other Sources" or "Capital Gains." Claim foreign tax credit in India for U.S. taxes paid (Form 67 and Form 16). U.S. mutual funds and ETFs don't face adverse treatment in India unlike in some European countries. Consider tax-efficient U.S. investments like municipal bonds (though still taxable in India) or tax-managed funds.

Q: What are the implications of maintaining U.S. LLCs or corporations while living in India?

U.S. business entities face complex Indian tax treatment. Single-member LLCs, disregarded for U.S. purposes, may be treated as corporations in India, creating potential double taxation. Multi-member LLCs could be classified as partnerships or companies depending on characteristics. C-corporations face double taxation with Indian tax on dividends received. S-corporations lose pass-through benefits for Indian tax purposes as India doesn't recognize S-corp elections. Place of Effective Management (POEM) rules could make U.S. entity Indian tax resident if key decisions made from India. Consider restructuring before relocating or establishing Indian entities for operations. Document management and control outside India to avoid POEM issues.

Q: How does India tax U.S. Social Security benefits?

Under the U.S.-India tax treaty, U.S. Social Security benefits received by U.S. citizens are taxable only in the United States, regardless of Indian residence status. This exclusive U.S. taxation right means India cannot tax these benefits even for Indian tax residents. This favorable treatment provides significant tax advantages compared to pension income, which may be taxable in both countries with foreign tax credits. Ensure you claim treaty benefits by submitting Form 10F to any Indian payer and obtaining a Tax Residency Certificate from the IRS if requested.

Q: Can I use the Indian healthcare system, and how does it affect my taxes?

Indian residents can access both public and private healthcare systems. Most expats opt for private health insurance costing ₹20,000-100,000 annually depending on coverage. Health insurance premiums up to ₹25,000 (₹50,000 for senior citizens) are deductible under Section 80D for Indian taxes. Preventive health checkups up to ₹5,000 also qualify. Medical expenses aren't generally deductible for U.S. taxes unless exceeding 7.5% of AGI. Indian health insurance satisfies ACA requirements. Many maintain international coverage for U.S. visits or medical evacuation. Employer-provided health insurance is tax-free perquisite in India up to prescribed limits.

Q: What triggers Indian tax audits, and how should I prepare?

Indian tax authorities use risk-based assessment with automated processing. Common triggers include high-value transactions reported in Annual Information Statement (AIS), mismatch between income declared and TDS/third-party reporting, claiming excessive deductions or refunds, foreign asset reporting inconsistencies, and cash deposits exceeding ₹10 lakh in savings accounts. International transactions face Transfer Pricing scrutiny. Preparation strategies include maintaining detailed documentation with English translations, working with qualified Chartered Accountant familiar with expat issues, reconciling Form 26AS with actual tax payments, responding promptly to notices (typically 30-day deadlines), and keeping proof of foreign taxes paid for treaty claims. Assessments can cover six years (seven for search cases).

Why Choose American Expat CPA as Your Tax Partner

Navigating the intersection of U.S. and Indian tax systems requires specialized expertise that goes beyond traditional tax preparation. At American Expat CPA, we've built our practice specifically around the unique challenges faced by U.S. citizens living abroad, with particular depth in Indian tax matters.

Our Specialized Expertise

Our team combines U.S. tax expertise with deep knowledge of Indian tax law and regulations. We maintain relationships with trusted Chartered Accountants across India to ensure seamless coordination of your dual filing obligations. Our professionals stay current with both U.S. tax reform and Indian Finance Act changes, including the impact of India's new tax regime options and evolving transfer pricing regulations on your overall tax strategy.

We understand that every expat situation is unique. Whether you're a tech professional on an Employment visa maximizing tax treaty benefits, a business owner navigating Indian company regulations and U.S. controlled foreign corporation rules, or a retiree managing pension distributions and investment income across borders, we develop customized strategies that optimize your specific circumstances. Our approach goes beyond compliance – we proactively identify opportunities to legally minimize your global tax burden while ensuring full compliance in both jurisdictions.

Comprehensive Service Offering

Technology-Enabled Global Service

We've built our practice for the digital age, serving clients across India and worldwide through secure, cloud-based systems. Our portal provides 24/7 access to your documents, secure messaging with your tax team, and digital signature capabilities that eliminate the need for physical meetings. We conduct video consultations that accommodate Indian time zones, ensuring convenient access to expert advice regardless of your location in India.

Transparent, Value-Based Pricing

We believe in transparent pricing with no surprise bills. Our comprehensive expat tax packages include all necessary forms and schedules, with clear pricing for additional services like amended returns or multi-state filings. Most importantly, our fee structure is designed to deliver value – the tax savings we identify typically far exceed our professional fees, making our services a smart investment in your financial future.

Your Success is Our Mission

Living in India as a U.S. expat should be about experiencing the incredible diversity, opportunities, and cultural richness – not stressing about tax compliance. We handle the complexity of dual taxation so you can focus on building your career and life in India. Our clients consistently save thousands in taxes while gaining peace of mind that their obligations are properly managed.

Whether you're just planning your move to India, already established as a resident, or anywhere in between, American Expat CPA provides the expertise and support you need. We understand the expat journey because we specialize exclusively in international tax matters for U.S. citizens abroad.