Moving In / Out of a Foreign Country
Key tax planning steps and residency rules when relocating between India and the US.
Moving from India to the US
- 1It is better to arrive after April and before September 28th or May 29th. Otherwise you are considered a resident of India and will be taxed on worldwide income including US income.
- 2Sell your stocks the year prior to coming to the US.
- 3Sell all Mutual Funds the year prior to coming to the US, or before arriving. Foreign Mutual Funds are considered PFIC and tax reporting is very complex. If you held Mutual Funds in the year you came to the US, make sure to use the Mark-to-Market election.
- 4Convert all your US brokerage accounts to resident accounts by providing the brokerage your SSN.
The government has tightened rules for high-earning individuals. Your deadline changes depending on how much you earn:
| Your Total Income (excl. foreign sources) | Max Days Allowed in India (Apr 1 – Departure) | Last Date to Leave (2026) |
|---|---|---|
| Less than ₹15 lakh | 181 days | September 28, 2026 |
| More than ₹15 lakh | 59 days | May 29, 2026 |
⚠ Section 6(1A) — Additional Rule to Watch
Even if you leave by May 29, you will be deemed a Resident of India if all three of the following apply:
- 1.You are an Indian citizen.
- 2.Your total income (other than foreign sources) is more than ₹15 lakh.
- 3.You are not liable to pay tax in any other country (i.e., you are a "tax resident of nowhere").
If all three conditions are met, India will tax your global income regardless of your physical presence.
Moving from the US to India
- 1Convert all your US brokerage accounts to non-resident accounts and file Form W-8BEN.
- 2Carefully plan your date of departure from the US. Return to India after October 2nd or February 2nd to avoid being taxed on worldwide income including income earned in the US.
- 3Do not sell US stocks.
- 4Make the best use of Resident but Not Ordinarily Resident (RNOR) status benefits. Consult with a CA in India.
Residency Rule — Outside India for 5+ Years
Condition 1: ≥ 182 days in the current Financial Year → Resident
Condition 2: ≥ 60 days in the current FY and ≥ 365 days in the preceding 4 Financial Years → Resident