How to Report India Income and Assets on a U.S. Tax Return

If you are a U.S. citizen, a green card holder, or a resident alien on an H-1B or L-1 visa, you must report India income on a US tax return, and you must separately report the Indian accounts and investments behind it. That includes salary you earned in India before you moved, interest on NRE, NRO and fixed deposits, rent from a flat in Pune, dividends and mutual fund gains, and the sale of property or shares. The rules sit in several different forms with different thresholds, which is why Indian-origin families are among the most common recipients of IRS foreign-reporting notices.

Who has to report Indian income and assets in the U.S.?

You are taxed as a U.S. resident if you are a U.S. citizen, hold a green card at any time in the year, or meet the substantial presence test. Our U.S. tax residency tests explain each test, and the first-year return guide covers the arrival year. A resident reports worldwide income whether or not India taxed it and whether or not a U.S. form such as a 1099 arrives. A nonresident alien reports only U.S.-source income, so the Indian reporting below mostly begins in the year you become a resident.

How do you report India income on a US tax return?

Every amount must be stated in U.S. dollars. IRS Publication 54 explains that income received and expenses paid in foreign currency are translated into dollars, and the IRS publishes yearly average exchange rates. Pick a documented rate and use it consistently. For a sale, translate the purchase price on the purchase date and the sale proceeds on the sale date, which often produces a different gain than the one shown in rupees.

Real property in India cannot be swapped for U.S. property in a like-kind exchange: IRS Publication 544 says property in the United States and property outside it are not like-kind.

Which foreign-asset reports apply?

Our guides cover each form in detail: FBAR, Form 8938, Form 8621 for PFICs and Forms 3520 and 3520-A. In summary:

• FBAR: required if you have a financial interest in, or signature authority over, foreign accounts whose combined value exceeded $10,000 at any time during the calendar year. It is filed electronically with FinCEN, not with the tax return, by April 15 with an automatic extension to October 15.
• Form 8938: attached to the return. For 2025 and 2026, the thresholds for a taxpayer living in the U.S. are more than $50,000 at year-end or $75,000 at any time if unmarried (or married filing separately), and $100,000 or $150,000 if married filing jointly. Thresholds for taxpayers living abroad are higher ($200,000 or $300,000 unmarried; $400,000 or $600,000 joint).
• Form 3520: required for a U.S. person who received more than $100,000 in a year from a nonresident alien individual or foreign estate that the person treated as gifts or bequests. A penalty of 5% of the gift per month, up to 25%, can apply to late reports.

A flat or plot of land that you own directly is not a financial account, so it is generally not listed on the FBAR; interests in entities that hold property, however, can be. Foreign pension plan interests are reportable on Form 8938 as described in the instructions, a point we cover in our retirement planning guide.

What do you need to gather?

1. A year-end and peak balance for every Indian account, including joint accounts, dormant accounts and accounts where you hold only signing authority.
2. Interest and dividend certificates, Form 16A or bank statements showing tax deducted at source.
3. Mutual fund and demat statements with purchase dates, cost and capital gains.
4. Rental agreements, municipal tax receipts and property sale deeds.
5. Records of gifts received from relatives, with the date and donor.
6. A copy of your Indian return and Form 26AS or AIS, so that income and tax credit figures agree.

How does India find out about U.S. accounts?

The Income Tax Department of India explains that under FATCA and the Common Reporting Standard it receives details of financial accounts held by Indian residents abroad, while the U.S. FATCA regime has foreign financial institutions report accounts held by U.S. taxpayers to the IRS. If you are an Indian resident, Schedule FA and Schedule FSI on the Indian return carry the matching disclosures; see our Schedule FA guide. If you are an NRI, make sure the Indian income that you claim is exempt there is also reported in the U.S. as taxable.

Worked example

Arjun, a green card holder in Naperville, has an NRO savings account with a peak balance of $30,000, an NRE fixed deposit of $45,000, an Indian equity mutual fund worth $25,000, and a flat in Pune rented out for the equivalent of $6,000 a year. His foreign accounts total more than $10,000, so he files an FBAR. His specified foreign financial assets are about $100,000 at year-end, which meets the single-filer threshold of $50,000, so he files Form 8938. The mutual fund is likely a PFIC, so Form 8621 applies. He reports interest, rent and fund distributions on his Form 1040, and claims a Form 1116 credit for Indian tax actually paid. All figures are hypothetical.

Mistakes to avoid

• Treating NRE interest as "tax-free" on the U.S. return.
• Reporting only accounts that earned interest. The FBAR counts the account, not the income.
• Forgetting accounts opened for you by parents, or accounts where you are only a joint holder.
• Using rupee gains instead of dollar gains on a sale.
• Not telling your Indian Chartered Accountant what you reported in the U.S.

How we can help

We prepare the U.S. return and the FBAR and Form 8938 filings for Indian-origin families in Aurora and across the Fox Valley, and we coordinate with your Indian Chartered Accountant so the Indian and U.S. returns agree. We do not prepare Indian returns. See our foreign account and asset reporting and individual tax return services. Penalty relief or credits are never guaranteed.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.