The India-USA corridor runs on a genuinely different set of rules than any other cross-border relationship this firm handles — because the US taxes on citizenship, not residence, which changes almost every other planning decision downstream of it.
Citizenship-based taxation
A US citizen or green card holder is taxed by the US on worldwide income no matter where they actually live — India, the Gulf, anywhere. This is the single fact that makes India-USA planning structurally different from India-Gulf planning: residency changes don't change US filing obligations the way they change most other countries' obligations. Every structuring decision on the India side has to be checked against its US tax consequence first, not as an afterthought.
FATCA and FBAR reporting
US persons with foreign financial accounts above the threshold must file an FBAR (Report of Foreign Bank and Financial Accounts) with the US Treasury, and often FATCA Form 8938 with the IRS — both entirely separate from whatever's already disclosed in India, and both carrying their own penalty exposure if missed. Indian bank accounts, demat accounts, and PPF balances all fall within scope.
PFIC exposure on Indian investments
Most Indian mutual funds are classified as Passive Foreign Investment Companies (PFICs) under US tax rules, which default to a punitive tax and interest regime unless a Qualified Electing Fund or mark-to-market election is made — and those elections have their own timing requirements. A US person building an Indian investment portfolio without accounting for PFIC status from day one is building a tax problem into the portfolio itself.
US estate tax exposure
India has no estate or inheritance tax today. The US does — US citizens and residents face federal estate tax on worldwide assets above a lifetime exemption threshold, a materially different exposure than the India-only side of a family's wealth would suggest on its own. Succession planning for an India-USA family has to model the US estate tax position specifically, not assume Indian succession rules are the only ones in play.
Common questions
I'm a US citizen living in India — do I still have to file US taxes?
Yes. The US taxes citizens on worldwide income regardless of where they live, which is unusual internationally — most countries tax based on residency, not citizenship. A US citizen in India still files a US return every year, alongside whatever Indian filing obligations apply, and the two have to be reconciled against each other, not handled separately.
Can a US person simply invest in Indian mutual funds the way a non-US person would?
Not without real tax cost. Most Indian mutual funds are classified as PFICs under US tax law, which triggers punitive default taxation unless specific elections are made — a US person's Indian investment portfolio typically needs to be structured differently from the start, not adjusted after the fact.
Does FBAR reporting apply even if the Indian accounts are already disclosed in India?
Yes — FBAR and FATCA reporting to the US are separate obligations from anything filed in India, triggered by US person status, not by where the accounts are held or what's already been disclosed elsewhere. Missing FBAR filings carries its own, separately calculated US penalty exposure.
See the full cross-border tax framework on our Family Office hub →