When I decided to move back from the US in 2017, I had a spreadsheet with 23 line items.
Twenty-three different things I either needed to sell, close, transfer, convert, or figure out what to do with.
401(k). IRA. Brokerage account. Checking accounts at two banks. Savings account. Credit cards. A car. Furniture. Appliances. Insurance policies. HSA. Stock options. Subscriptions. Storage unit. Security deposit. The list went on.
And here’s the thing – each one of those 23 items had its own set of rules, tax consequences, and timing considerations.
Get the timing wrong on even one of them, and you could lose thousands of dollars to unnecessary taxes or penalties.
I’ve since helped hundreds of families in our WhatsApp community navigate this exact process.
Some did it beautifully. Some made expensive mistakes. I’m writing this so you can be in the first group.
This is the most comprehensive guide on this topic you’ll find anywhere. Bookmark it.
You’ll come back to it multiple times during your move.
The Most Important Concept: Your Tax Residency Timeline
Before we touch a single asset, you need to understand this. Everything depends on it.
Your tax status changes as you move from the US to India. And these changes create windows of opportunity – and windows of risk.
In the US:
When you leave, you may still be a US tax resident for part of the year (or the full year, depending on your departure date and the Substantial Presence Test). If you’re a US citizen or green card holder, you remain a US tax person regardless.
If you’re on an H1B or other visa (like I was), your US tax residency typically ends when you leave.
In India:
When you arrive, your Indian residential status follows these stages:
- NRI (if you’ve been outside India for 182+ days in the financial year)
- RNOR (Resident but Not Ordinarily Resident) – typically for 2-3 years after returning
- ROR (Resident and Ordinarily Resident) – after the RNOR period ends
Why this matters enormously:
During RNOR status, your foreign income (including income from US investments) is generally NOT taxable in India. This is a 2-3 year golden window.
Once you become ROR, your worldwide income – including US investment gains, 401(k) withdrawals, rental income from US property, dividends from US stocks – becomes taxable in India.
The DTAA between India and the US helps avoid double taxation, but navigating it adds complexity and cost.
The bottom line: Many liquidation decisions should be timed around this RNOR window. More on this throughout the guide.
For a detailed understanding of these status changes, check our guide on NRI status change and 182-day rule.
Asset-by-Asset Liquidation Strategy
Let me walk through every major asset type. For each one, I’ll cover: what it is, your options, the tax angle, and my recommendation.
1. Retirement Accounts – 401(k)
This is usually the largest and most complex asset. Let’s break it down carefully.
Your options:
Option A: Leave it in the 401(k)
Your money stays with your employer’s plan. It continues to grow tax-deferred. You withdraw after age 59.5 without the 10% early withdrawal penalty.
Pros: No immediate tax hit. Continued growth. Simple.
Cons: Limited investment options (only what your employer plan offers). Some employers may force you out if your balance is below $5,000 (or even $7,000 under newer rules). You can’t contribute anymore. The estate tax trap (more on this below). Managing from India is harder.
Option B: Roll over to an IRA
Transfer the 401(k) to a Traditional IRA or Roth IRA at a brokerage firm.
Traditional IRA rollover: No immediate tax. Money continues growing tax-deferred. More investment choices than a 401(k). You control the account directly.
Roth IRA conversion: You pay income tax NOW on the full amount. But future withdrawals (after age 59.5 and 5 years) are tax-free in the US. India’s treatment of Roth withdrawals is debatable – some tax advisors say India may still tax the earnings portion.
Pros: More control, more investment options, easier to manage.
Cons: Finding a brokerage that accepts international addresses is tricky. Charles Schwab and Fidelity are generally NRI-friendly for existing accounts. TD Ameritrade (now part of Schwab) also works. Vanguard has been known to restrict some services for non-US residents.
Option C: Cash out
Withdraw everything. Pay taxes and penalties. Move the money to India.
If you’re under 59.5: The IRS withholds 30% (for non-resident aliens) PLUS you may owe a 10% early withdrawal penalty. On a $100,000 withdrawal, you could lose $40,000+ right away.
If you’re over 59.5: No penalty. But the IRS still withholds 30% for non-resident aliens (unless reduced by the India-US tax treaty using Form W-8BEN).
The estate tax trap nobody talks about:
This is critical. If you’re NOT a US citizen and you die while living in India with US assets (including 401(k), IRA, brokerage accounts) exceeding $60,000, your heirs face US estate tax of up to 40%.
Yes. $60,000 is the exemption for non-citizens, non-residents. Compare that to the $13+ million exemption for US citizens.
If you have a $500,000 401(k) and you die in India, your family could owe roughly $176,000 in US estate taxes. On top of Indian inheritance procedures.
This is why many returning NRIs (especially those who were on H1B and never became citizens) strategically draw down their US retirement accounts over time rather than letting large balances sit.
My recommendation for 401(k):
If you’re under 40 and the balance is under $50,000: Consider cashing out. The tax hit hurts, but you eliminate complexity and estate tax risk. Reinvest in India during your RNOR window.
If you’re 40-55 with a substantial balance ($100K+): Roll over to a Traditional IRA at a brokerage that serves international clients. Begin strategic withdrawals during your RNOR period (first 2-3 years in India) when India doesn’t tax this foreign income. File Form W-8BEN to potentially reduce US withholding.
If you’re 55+: Leave it or roll over to IRA. You’re close to penalty-free withdrawal age. Plan systematic withdrawals starting at 59.5.
For a deeper dive, see our dedicated 401(k) guide for returning NRIs.
2. IRA (Traditional and Roth)
If you already have an IRA (separate from your 401(k)), the considerations are similar but with some differences.
Traditional IRA:
Same tax treatment as 401(k) withdrawals. 30% withholding for non-resident aliens. 10% penalty if under 59.5.
The RNOR strategy applies: withdraw during your first 2-3 years back when India doesn’t tax foreign income. You only pay US tax.
Roth IRA:
This is the trickiest one.
Withdrawals of your contributions (the money you put in) are always tax-free in the US. No age restriction.
Withdrawals of earnings are tax-free in the US if you’re over 59.5 AND the account has been open for 5+ years.
India’s position: There’s genuine ambiguity here. Some tax professionals argue India should honor the tax-free status. Others say India may tax Roth earnings as regular income since India never gave a tax deduction on those contributions.
My recommendation for IRA:
Traditional IRA: Use the RNOR window for withdrawals if you need the money. Otherwise, let it grow and plan systematic withdrawals after 59.5.
Roth IRA: This is arguably the best US account to keep long-term. Your contributions can be withdrawn anytime tax-free. Earnings grow tax-free (in the US at least).
And the estate tax risk applies, so keep balances reasonable relative to the $60,000 threshold when combined with other US assets.
Section 89A – the new hope:
India introduced Section 89A in the 2021 budget specifically to address double taxation of foreign retirement accounts.
The idea is to defer Indian taxation on 401(k)/IRA income until actual withdrawal (matching the US treatment).
However, the specific rules and notifications are still evolving. You need to file Form 10EE to elect this benefit. Consult a cross-border tax advisor for your specific situation.
3. US Brokerage Accounts (Stocks, ETFs, Mutual Funds)
If you have a regular (taxable) brokerage account with stocks, ETFs, or mutual funds, here’s what to think about.
Key issue: Tax-loss and tax-gain harvesting before you leave.
Before your US tax residency ends, review your portfolio for:
- Positions with losses: Sell them to “harvest” the tax loss. You can use up to $3,000 of net capital losses to offset ordinary income on your final US tax return. Remaining losses carry forward.
- Positions with long-term gains: If you’re in a low-income year (common in the year of departure), you may be able to realize long-term gains at the 0% rate (for 2025, up to about $48,350 for single filers).
After you become a non-resident alien:
US dividends from your brokerage: Subject to 30% withholding (reducible to 25% under the India-US DTAA).
US capital gains: Generally NOT taxable in the US for non-resident aliens (unless it’s real property – that’s FIRPTA). This is a major advantage.
But in India:
Once you become ROR (after the RNOR window), your worldwide capital gains become taxable in India. Indian tax on long-term capital gains from foreign stocks is 12.5% (after Budget 2024 changes) above Rs 1.25 lakh per year.
The RNOR window opportunity:
If you sell US stocks during your RNOR period, the capital gains are:
- Not taxable in the US (for non-resident aliens on most securities)
- Not taxable in India (RNOR – foreign income not taxable)
This is potentially a tax-free window for realizing gains. It’s one of the most valuable planning opportunities for returning NRIs.
My recommendation for brokerage accounts:
12-6 months before moving: Harvest tax losses against gains. Rebalance your portfolio.
During RNOR period (first 2-3 years in India): Strategically sell positions with large unrealized gains. This may be the only time these gains are taxable in neither country.
Long-term: If you want to keep investing in US stocks from India, platforms like Interactive Brokers, Vested, and INDmoney allow this. But the tax reporting becomes more complex.
Brokerage account maintenance after moving:
Some US brokerages restrict accounts for non-US residents. Here’s what community members have reported:
- Charles Schwab: Generally keeps accounts open for non-residents. May restrict some features.
- Fidelity: Has been known to restrict new purchases for non-resident accounts. Selling and withdrawing is usually fine.
- Vanguard: Can be restrictive. Some members reported being asked to liquidate.
- Interactive Brokers: Most international-friendly. Supports non-US addresses well.
- Robinhood: Does NOT support non-US residents. Close before leaving.
- Webull: Similar to Robinhood. US address required.
Important: Update your tax status (W-8BEN form) with your brokerage before or soon after you leave. This ensures proper withholding on dividends.
4. US Real Estate
This is the other big one. And the tax rules are very different depending on WHEN you sell.
Selling BEFORE you leave (while still a US tax resident):
You’re treated like any US seller. Capital gains tax applies on profit. If it was your primary residence for 2 of the last 5 years, you can exclude up to $250,000 of gain ($500,000 if married filing jointly) under IRC Section 121.
This is often the cleanest option. No FIRPTA complications. Straightforward tax treatment.
Selling AFTER you leave (as a non-resident alien):
FIRPTA (Foreign Investment in Real Property Tax Act) kicks in. The buyer must withhold 15% of the GROSS sale price (not just profit) and send it to the IRS.
Example: You sell a property for $500,000. The buyer withholds $75,000 (15%) and sends it to the IRS. Your actual capital gain might only be $100,000, meaning your real tax liability is around $15,000-20,000. You get the excess back when you file Form 1040-NR – but that refund can take 6-12 months.
The $250,000 primary residence exclusion may still be available if you meet the 2-out-of-5-year test. But the FIRPTA withholding still happens at closing. You claim the exclusion on your tax return and get a refund.
Keeping the property and renting it out:
Some NRIs keep their US property as a rental investment. This can work, but consider:
- Rental income is taxable in the US (reported on Form 1040-NR)
- A property management company typically charges 8-10% of rent
- Maintenance, repairs, insurance, property taxes – all managed remotely
- Rental income also becomes taxable in India once you’re ROR (with DTAA credit for US taxes paid)
- FBAR reporting requirements for foreign financial accounts
- Foreign asset disclosure requirements on your Indian ITR
My recommendation for US real estate:
If you can, sell before leaving the US. Especially if you qualify for the $250K/$500K exclusion. Clean, simple, maximum benefit.
If you sell after leaving, budget for the 15% FIRPTA withholding being locked up for 6-12 months. Work with a tax professional who handles FIRPTA regularly.
If you’re keeping it as rental, make sure the math works after ALL costs (management, taxes in both countries, maintenance, vacancy). Most community members who’ve kept US rentals eventually sell within 3-5 years because the remote management hassle outweighs the returns.
5. Bank Accounts
You need to be strategic here. Don’t close everything.
What to keep:
One checking account at a major US bank. This is essential for:
- Receiving any US-source income (tax refunds, 401(k) withdrawals, rental income, Social Security later)
- Paying any US bills (property tax if you kept real estate, insurance, credit card payments)
- Future US visits
Banks that work well for non-residents:
- Charles Schwab (checking account linked to brokerage – no international ATM fees)
- Bank of America – generally keeps accounts open, though some members report branch-level inconsistencies
- Chase – generally fine, but may require periodic address verification
- Citibank – good for international customers
- Capital One – 360 checking works well remotely
What to close:
- Savings accounts earning negligible interest
- CDs that have matured
- Accounts at smaller banks or credit unions that may have issues with non-US addresses
- Any accounts with monthly maintenance fees you don’t need
Important: Change your address to a US-based trusted contact (family member, friend) BEFORE you update to an Indian address. Some banks freeze accounts when they see a foreign address update. Do the address change at the bank branch in person, ideally.
For more on this, read our detailed guide on keeping US bank accounts after moving.
6. Credit Cards and Credit Score
Your US credit score is an asset. Don’t destroy it.
What to keep:
Keep 1-2 credit cards with no annual fee. The age of your credit history matters for your US credit score. If you ever return to the US, or need US credit (for a property, car rental, etc.), a maintained credit score is invaluable.
Good no-annual-fee options: Citi Double Cash, Chase Freedom Unlimited, Discover it.
If you have a premium card with a high annual fee (Amex Platinum, Chase Sapphire Reserve), downgrade it to a no-fee version from the same issuer. This preserves the account history.
Set up auto-pay for any remaining balance. Use the card for a small recurring charge (like a $10/month streaming subscription) to keep it active.
For more on maintaining your credit after the move, check our guide on credit score after moving to India.
7. HSA (Health Savings Account)
This is an often-overlooked asset.
The good news: An HSA is one of the most tax-advantaged accounts in the US. Contributions were tax-deductible. Growth is tax-free. Withdrawals for medical expenses are tax-free.
After moving to India:
You can no longer contribute to the HSA. But you can keep the account and let it grow.
You CAN use HSA funds for qualified medical expenses, even expenses incurred outside the US, as long as they would qualify as medical expenses under US tax law.
My recommendation:
If the balance is small (under $2,000): Consider using it for any remaining US medical bills or out-of-pocket dental/vision expenses before you leave. Easier than managing a small account from India.
If the balance is substantial ($5,000+): Keep it. Let it grow. Use it for qualified medical expenses (even in India). After age 65, you can withdraw for any purpose – you just pay income tax on non-medical withdrawals (no penalty).
One complication: HSA providers may have issues with non-US addresses. Fidelity HSA and Lively HSA tend to be more accommodating. Some members have kept a US mailing address on the account while actually living in India.
8. Stock Options and RSUs
If you work for a US tech company, this can be significant.
Vested stock options / RSUs you already own:
These are your property. You can sell them anytime (subject to any company blackout periods).
Strategy: Exercise and sell before leaving if possible. This makes the tax treatment simpler – all reported on your final US tax return.
If you hold them after becoming a non-resident alien, the taxation gets complicated. The income is split between US-source (for the period you worked in the US) and non-US-source.
Unvested RSUs:
These will continue to vest after you leave. The portion that vested while you were in the US is US-source income. The portion that vests after you leave may not be – depends on the vesting schedule and your work location.
Your employer will likely continue to withhold US taxes on vesting events. You may need to file a US tax return to claim proper treatment.
My recommendation:
If you have significant unvested equity, consult a tax advisor BEFORE leaving. The allocation of income between US and non-US sources can mean thousands of dollars in tax difference.
If your options are underwater (exercise price higher than current stock price), they’re worthless. Let them expire.
9. Cars and Vehicles
This one’s straightforward.
Sell before leaving. You can’t practically ship a US-spec car to India (different driving side for left-hand-drive, emission standards, import duties of 100%+).
When to sell:
Start the process 2-3 months before your departure. Private party sales get better prices than dealer trade-ins, but take longer.
Use Carvana, CarMax, or KBB Instant Cash Offer for quick, hassle-free sales. You’ll get less than private party but save weeks of effort.
Lease returns:
If you’re on a lease, check your termination options. Early termination fees can be steep. If your lease ends close to your departure date, try to time them together. Sometimes you can transfer your lease to someone else through services like LeaseTrader or Swapalease.
Community members have also had luck selling their cars on apps to sell stuff before returning.
10. Household Items and Furniture
The math almost never works for shipping furniture.
Shipping a container from the US to India costs $3,000-$8,000+ depending on volume and destination city.
Add customs duties (which can be significant on used household goods above your duty-free allowance), and the total cost often exceeds the value of the furniture.
What DOES make sense to ship:
- Sentimental items (family heirlooms, photo albums, kids’ special items)
- High-quality electronics (TVs, gaming consoles – check voltage compatibility)
- Professional equipment
- Books (duty-free in India)
What to sell or donate:
- Furniture (sell on Facebook Marketplace, OfferUp, or Craigslist)
- Appliances (most US appliances run on 110V – India uses 220V)
- Heavy items with low resale value
- Seasonal items (heavy winter gear you won’t need in most Indian cities)
Start selling 4-6 weeks before your move. The last 2 weeks will be hectic with everything else.
For shipping strategies, check our guide on shipping your belongings to India.
11. Social Security
If you’ve worked in the US for 10+ years (40 quarters of credit), you’re eligible for Social Security benefits.
Can you collect Social Security while living in India?
Yes. India is on the list of countries where the SSA pays benefits. Your benefits will be deposited into your US bank account (which is why you keep that one account open).
When to claim:
You can start as early as 62 (reduced benefit) or wait until 67 (full benefit) or even 70 (maximum benefit). Each year you delay past 62 increases your monthly benefit.
Tax treatment:
The US won’t tax your Social Security if it’s your only US income and the amount is below certain thresholds.
India generally won’t tax Social Security benefits received from the US under the DTAA.
My recommendation:
Don’t touch this until you approach claiming age. Just make sure you have your 40 credits. Check your estimated benefits at ssa.gov. Keep your US bank account open for eventual deposits.
Our guide on Social Security tax for NRIs has more details.
12. Life Insurance Policies
We have a comprehensive guide on life insurance for returning NRIs, but here’s the liquidation perspective.
Term life insurance: Usually ends when you leave (employer group policy) or continues if individual. Keep individual policies active until you have Indian coverage in place. Never have a gap.
Whole life / Universal life with cash value: Evaluate whether to keep or surrender. If surrendering, understand the tax implications – gains above your cost basis are taxable.
Key insight: Get your Indian life insurance sorted BEFORE canceling US policies. The transition period is when you’re most vulnerable.
13. Digital Assets
PayPal: Transfer your balance to your US bank account. PayPal’s India account is separate and cannot be linked to US accounts.
Venmo / Zelle: These are US-only. Transfer balances out before leaving.
Cryptocurrency: India’s crypto regulations are strict. A 30% tax applies on crypto gains, plus 1% TDS on transactions above Rs 50,000. If you have significant crypto holdings, consult a tax advisor about whether to liquidate in the US (where rates may be lower) or transfer to an Indian exchange.
Streaming subscriptions: Cancel US-based subscriptions. India versions of Netflix, Spotify, YouTube Premium are much cheaper.
The Master Timeline: When to Do What
Here’s a month-by-month action plan. Adjust based on your specific departure date.
12 Months Before Departure
- [ ] List ALL your US assets in a spreadsheet with current values
- [ ] Consult a cross-border tax advisor (this is NOT optional for complex situations)
- [ ] Start deciding: keep, liquidate, or transfer for each asset
- [ ] If selling real estate, list the property now (sales take time)
- [ ] Begin reviewing your investment portfolio for tax-loss harvesting opportunities
- [ ] Check your Social Security credits at ssa.gov
- [ ] Apply for Indian PAN card if you don’t have one
6 Months Before Departure
- [ ] Execute any Roth IRA conversions (if strategically beneficial)
- [ ] Start selling furniture, household items, and non-essential belongings
- [ ] Determine which bank accounts and credit cards to keep
- [ ] Update beneficiaries on all accounts (401(k), IRA, life insurance, bank accounts)
- [ ] Begin the process of exercising stock options if applicable
- [ ] Research and open an NRE account or ensure your existing one is ready
- [ ] Get multiple quotes for international shipping if applicable
3 Months Before Departure
- [ ] Sell your car (or start the process)
- [ ] Close unnecessary bank accounts and redirect auto-pays
- [ ] Execute final tax-loss harvesting in brokerage accounts
- [ ] Sell stock options and RSUs that you’ve decided to liquidate
- [ ] Notify your 401(k) plan administrator about your departure
- [ ] File Form W-8BEN with your brokerage accounts
- [ ] Set up auto-pay on credit cards you’re keeping
- [ ] Ship belongings to India if applicable
- [ ] Close or transfer any remaining digital accounts
1 Month Before Departure
- [ ] Sell remaining household items (final garage sale, donate the rest)
- [ ] Close local bank accounts you’re not keeping
- [ ] Forward mail to a US address (USPS mail forwarding or use a virtual mailbox like Traveling Mailbox or US Global Mail)
- [ ] Download/save all financial statements and tax documents
- [ ] Transfer any PayPal/Venmo balances to your keeping bank account
- [ ] Get multiple copies of your credit report (you won’t easily access this from India)
- [ ] Cancel US health insurance (effective your departure date, not before)
- [ ] Cancel utilities, lease, subscriptions
First Month in India
- [ ] Convert NRE account to resident savings or RFC account
- [ ] Wire initial funds from US account to India for settling-in expenses
- [ ] Begin the RNOR clock (this is when your 2-3 year window starts)
- [ ] If strategic withdrawals from 401(k)/IRA are planned during RNOR, start the process
During RNOR Period (First 2-3 Years)
- [ ] Execute strategic asset liquidations that benefit from the RNOR window
- [ ] Sell US brokerage positions with large unrealized gains
- [ ] Make 401(k)/IRA withdrawals if part of your plan
- [ ] Start investing in India with the proceeds
- [ ] File US tax returns (yes, you still need to file for years with US-source income)
- [ ] File Indian ITR (required once you’re a resident)
How to Move Money from the US to India
Once you’ve liquidated assets, you need to actually move the money.
For large transfers ($50,000+):
Wire transfer from your US bank to your Indian NRE (before status change) or resident/RFC account. This is the safest and most straightforward method.
Your bank will charge $25-$50 per wire. The exchange rate your bank offers may not be the best. Compare with:
- Wise (formerly TransferWise) – mid-market rate, low transparent fees
- Remitly – good for amounts up to $10,000 per transaction
- OFX or InstaReM – good for very large transfers
For amounts over $250,000, Indian regulations require Forms 15CA and 15CB (CA certification) for tax compliance on the receiving end.
For our detailed guide, see how to send money from the US to India and sending large amounts.
The exchange rate matters hugely.
On a $200,000 transfer, a 1% difference in exchange rate means Rs 1.6+ lakh more or less in your Indian account.
Monitor rates. Use rate alerts. Transfer in tranches if the amount is very large – this averages out exchange rate fluctuations.
The RNOR Strategy – Putting It All Together
Let me show you how the RNOR window works with a real scenario.
Rahul’s situation (based on a composite of several community members):
- Age 38, returning from California on H1B
- 401(k): $180,000
- Roth IRA: $45,000
- Brokerage account: $120,000 (cost basis: $80,000, so $40,000 unrealized gain)
- US home: Already sold before moving (used $250K exclusion)
- HSA: $8,000
- Bank accounts: Keeping one checking + one credit card
- Car: Sold
Rahul’s strategy:
Year 1 (RNOR):
- Sells all brokerage positions with $40,000 in gains
- Tax result: No US tax on capital gains (non-resident alien on portfolio securities). No Indian tax (RNOR, foreign income exempt). Total tax: $0 on $40,000 gain.
- Withdraws $30,000 from 401(k) – IRS withholds 30% ($9,000). No Indian tax (RNOR). Files US tax return, may get some withholding back depending on treaty benefits.
- Transfers combined proceeds to India via wire
Year 2 (RNOR):
- Withdraws another $30,000 from 401(k) with same tax treatment
- Keeps Roth IRA intact (contributions can be withdrawn tax-free anytime)
- Invests India proceeds in mutual funds via SIP
Year 3+ (ROR):
- Any further 401(k) withdrawals now taxable in BOTH countries (with DTAA credit)
- Leaves remaining 401(k) balance ($120,000) to grow until 59.5
- Uses HSA for medical expenses in India
- Roth IRA continues growing for future use
Net result: Rahul saved roughly Rs 5-8 lakh in taxes by timing his liquidations during the RNOR window versus doing it all after becoming ROR.
Common Expensive Mistakes
Mistake 1: Cashing out 401(k) on the last day of work
Many NRIs panic and withdraw everything immediately. If you’re under 59.5, you lose 30% to withholding PLUS 10% penalty. That’s up to 40% gone immediately. Plus state tax if applicable.
Instead: Roll over to an IRA. Take time to plan.
Mistake 2: Ignoring the US estate tax for non-citizens
If you’re not a US citizen and you die with more than $60,000 in US assets, your heirs face up to 40% estate tax. This applies to 401(k), IRA, brokerage, bank accounts, and real property.
If you have $300,000 across US accounts: ($300,000 – $60,000) x 40% = $96,000 in potential estate tax. That’s money your family loses.
Plan: Gradually draw down US assets over time. Consider the size of your total US asset exposure.
Mistake 3: Not filing FBAR and FATCA from India
If your combined balance in all foreign (non-Indian) financial accounts exceeds $10,000 at any point during the year, you must file FBAR (FinCEN Form 114) with the US Treasury. This includes your Indian accounts once you’re no longer a US person.
Wait – it also works the other way. India requires you to disclose foreign assets in your ITR. Your US bank accounts, 401(k), IRA, brokerage, insurance policies with cash value – all must be reported.
Penalties for non-filing are severe in both countries.
Mistake 4: Selling real estate AFTER leaving without FIRPTA planning
The buyer withholds 15% of the GROSS sale price. On a $600,000 home, that’s $90,000 locked up with the IRS for 6-12 months. Even if your actual tax is $0 (because you qualify for the $250K exclusion), you still wait for the refund.
If you can, sell before you leave.
Mistake 5: Converting everything to INR at once
If you’re transferring $300,000 to India, don’t do it in one shot. The exchange rate on any single day could be favorable or unfavorable. Transfer in 3-4 tranches over 2-3 months to average out the rate.
Mistake 6: Not keeping a US bank account and credit card
You WILL need US banking access in the future. Tax refunds, Social Security, final paychecks, 401(k) distributions, selling remaining assets – all go to a US account. Closing everything and then needing to reopen from India is a nightmare.
Do You Need a Professional?
For simple situations (single, no real estate, small 401(k), no stock options) – you can probably navigate this with guides like this one and some research.
For complex situations (married, real estate in the US, significant retirement accounts, stock options/RSUs, investments in both countries, green card holder or US citizen spouse) – yes, you absolutely need a cross-border tax professional.
The cost of a good advisor ($2,000-$5,000) is almost always less than the cost of getting the tax planning wrong.
Look for a CPA or EA (Enrolled Agent) who specifically handles US-India cross-border taxation. A regular US CPA who doesn’t understand RNOR status or DTAA Article 20 won’t be enough. Similarly, an Indian CA who doesn’t understand FIRPTA or Form W-8BEN won’t be enough.
You need someone who understands both. Our guide on financial advisors for NRIs can help you find the right professional.
FAQ
Should I liquidate EVERYTHING before moving?
No. A hybrid approach works best. Liquidate things that are hard to manage remotely or have unfavorable tax treatment after you leave (real estate, cars, small accounts). Keep things that benefit from continued growth or have tax advantages (401(k), IRA, Roth IRA, Social Security credits).
What if I’m a US citizen moving to India?
Everything above applies, but with a crucial difference – US citizens must file US tax returns and pay US taxes on worldwide income, forever. There’s no “becoming a non-resident alien” advantage. The RNOR window in India still helps with Indian taxes, but your US tax obligations continue. Consider the implications carefully, or read our guide on how some NRIs cancel a US green card.
Can I open new US investment accounts after moving to India?
Extremely difficult. Most US brokerages won’t open new accounts for non-residents. If you want US market exposure from India, use platforms that specifically serve Indian residents investing in US stocks. Investing in US stocks from India is our detailed guide.
What about my 529 education savings plan?
You can keep it. The beneficiary (your child) can use 529 funds for qualified education expenses at eligible institutions worldwide (including some Indian universities). The account grows tax-free for education use. But if your child doesn’t use it for education, you’ll face penalties on earnings.
Check if your child’s intended Indian school or college qualifies as an “eligible educational institution” under Section 529.
How much money should I keep in the US?
Enough to cover 6-12 months of any ongoing US expenses (property taxes if you kept real estate, insurance, credit card payments, emergencies during US visits). For most people, $5,000-$15,000 in a US checking account is sufficient.
What about my US pension (if applicable)?
Similar to 401(k) in many ways. It stays with your employer until you’re eligible to claim. Benefits are usually paid monthly starting at retirement age. Taxation follows DTAA rules. Keep your US bank account for receiving pension payments.
I’m on OCI/green card. Does anything change?
Green card holders are treated as US persons for tax purposes even after moving to India. You continue filing US tax returns on worldwide income. This makes the tax planning more complex but also means you get the higher estate tax exemption ($13M+ vs $60K).
OCI holders are treated like any other non-citizen, non-resident for US tax purposes after leaving. Same rules as H1B holders.
How do I handle state taxes?
Some states (like California and New York) are aggressive about claiming you as a resident even after you leave. Make sure you formally establish non-residency: update your driver’s license, voter registration, and mailing address. Get a letter from your employer confirming your last day. Keep documentation of your departure.
States with no income tax (Texas, Florida, Washington, Nevada, etc.) make this easier.
What about my Amazon/eBay seller account, or online business income?
If you have US-source business income, it’s taxable in the US regardless of where you live. You may need to continue filing US tax returns. Consult a tax professional.
Disclaimer: Tax laws are complex and change frequently. The information in this article is for educational purposes only and should not be treated as tax, legal, or financial advice. Cross-border taxation involves both US and Indian regulations, and individual circumstances vary significantly. Consult qualified professionals in both jurisdictions before making financial decisions. Specific rates, limits, and rules mentioned are approximate and based on 2025-2026 information.
If you’re planning your move back, join our WhatsApp community at https://backtoindia.com/groups – 20,000+ NRIs helping each other with real, lived experience. It’s free and volunteer-run.
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