Complete Guide: How to File Your US Taxes from India

Filing US taxes from India is fully possible online, but you must follow US expat rules carefully to stay compliant and avoid double taxation. This guide walks through eligibility, documents, deductions, and a clear step‑by‑step filing process tailored for US citizens and Green Card holders in India.

Who must file from India

- US citizens and Green Card holders must file a US tax return every year if their worldwide income crosses the IRS filing threshold, even if they live in India full‑time.
- Worldwide income includes Indian salary, freelancing income, rent, interest, dividends, and US or other foreign income, not just US‑source income.
- You may also need to file Indian income tax returns separately if your Indian income exceeds local thresholds under Indian tax law.

Key deadlines and extensions

- Standard US tax deadline is usually 15 April, but Americans abroad get an automatic 2‑month extension (typically to 15 June) to file their federal return.
- You can request a further extension (often to mid‑October) by filing the appropriate IRS extension form before the June deadline, though any tax due is still expected by April to avoid interest.
- FBAR (foreign bank reporting) deadlines generally align with the April deadline with an automatic extension to October, but check each year’s IRS guidance for exact dates.

Documents you need ready

- Identification and status: US passport, SSN; if you do not have an SSN, an ITIN is required for filing.
- Income proofs: Indian Form 16 or salary slips, freelance invoices, rental agreements, bank interest statements, investment statements from Indian and US brokers.
- Tax proofs: Indian ITR copies, Form 26AS/Annual Information Statement, TDS certificates, and details of any foreign taxes paid for Foreign Tax Credit claims.

Extra forms US expats in India may need

- Form 2555: To claim the Foreign Earned Income Exclusion (FEIE) on qualifying Indian salary or self‑employment income if you meet the physical presence or bona fide residence tests.
- Form 1116: To claim Foreign Tax Credit for income taxes paid in India, especially for income not covered by FEIE or where FTC is more beneficial.
- FinCEN Form 114 (FBAR) and potentially Form 8938: To report foreign accounts and assets if account balances or asset values exceed US reporting thresholds.

Common expat tax breaks (FEIE vs FTC)

- Foreign Earned Income Exclusion lets you exclude up to a yearly‑adjusted amount of foreign earned income (for 2025 this limit is around the low‑$130,000 range per qualifying person), but it applies only to active earned income, not to investment income.
- Foreign Tax Credit reduces US tax by giving credit for income taxes paid to India and is often better for high‑tax countries or for income types not eligible for FEIE.
- Many expats combine strategies (for example, FEIE for salary plus FTC for investment income) to minimize or eliminate US tax while complying with both US and Indian rules.

Step‑by‑step: filing US taxes from India

- Step 1 – Determine your filing status and residency: Confirm you are a US citizen/Green Card holder and identify whether you qualify under the FEIE residency tests or plan to rely mainly on Foreign Tax Credit.
- Step 2 – Gather all information: Compile your global income details, Indian tax documents, bank and investment statements, and foreign account balances for FBAR/FATCA reporting.
- Step 3 – Choose your approach: Decide whether you will self‑file using reputable expat tax software or engage an expat tax professional familiar with both US and Indian rules.
- Step 4 – Prepare Form 1040 and schedules: Report all worldwide income in US dollars using year‑average or transaction‑date exchange rates, attach Schedules (such as Schedule B for interest/dividends) as needed.
- Step 5 – Add expat forms: Complete Form 2555 for FEIE and/or Form 1116 for Foreign Tax Credit, as well as FBAR and Form 8938 if your foreign accounts or assets cross thresholds.
- Step 6 – E‑file from India: Submit electronically through IRS‑approved software or your tax preparer and arrange any payment or refund via US bank, international transfer, or other accepted methods.

FBAR and foreign asset reporting

- You must file an FBAR if the combined maximum value of all non‑US financial accounts (Indian savings accounts, FDs, trading accounts, etc.) exceeded 10,000 USD at any point during the year.
- Form 8938 has higher thresholds but also requires reporting certain foreign financial assets; requirements depend on your filing status and whether you live abroad, so expats in India should verify the latest limits each year.

What if you never filed before?

- US citizens and Green Card holders who have missed several years of returns while living in India may be able to use the IRS Streamlined Filing Compliance Procedures to catch up with reduced penalties if non‑compliance was non‑wilful.
- Typically this involves filing three years of back tax returns and six years of FBARs, paying any tax and interest due, and certifying that previous non‑filing was not intentional.

When to seek professional help

- Consider a US–India expat tax specialist if you have high income, complex investments, equity compensation, business entities, or years of unfiled returns, as cross‑border rules and the US–India tax treaty can be complex.
- A professional can help optimize FEIE vs FTC, correctly apply the treaty, and reduce the risk of penalties from incorrect FBAR/FATCA reporting while staying within both US and Indian tax regulations.