One of my friend is moving to USA after working in India for 15+ years. He has invested in MF, SIP, stocks, PF, PPF, FDs, and has own house in India. Any suggestions for him in case if he can save tax on foreign income once he move here or avoid hassle ?
If he moves to USA he has to pay annual tax on ALL income from India (even income from Indian tax-exempt schemes). If his FD is a 5 year FD, he has to calculate per year profit on FD and pay tax on it. He has to do FBAR filing as well. Penalties for trying to hide income are huge (50% of max account balance) for FBAR noncompliance. Better to hire a CPA here every year for couple hundred dollars who knows how to file tax on foreign income. It's all written on IRS website in tax laws. He can save tax in us by using US IRA, 401(k) etc.
Not only income, but OP’s friend will also owe US taxes on any capital gains (including from the sale of property). Suggest to OP’s friend to take a look at divesting his assets with this in mind before moving to the US. For stocks that he plans to hold long term, he may want to reset his cost basis (before his move) by selling and buying them back at the same price. Of course this needs to be weighed against Indian taxes owed which I know nothing about.
Agreed. jujkpsst is correct.
Tell that to your CEO first
We did by electing Trump. MAGA
Tell your friend to invest heavily in drivers education, like a 6 month course, don’t buy a Prius, and don’t drive in the left lane. Avoid wearing open toed sandals at all costs. Wear deodorant, don’t eat weird shit and reheat it in the break room, especially seafood. Other than that, he’ll do fine! #dotheneedful
Your friend should consolidate his assets to banks that are online friendly. ICICI is better than govt banks. This will make his filing taxes in US and managing money in India easy. He needs to file taxes on India income and interest gains in US, but you also get credit for the tax (TDS) you pay to Indian govt. So it's not that bad. He can learn it once, and do it himself. He should also consider bringing as much money to US as possible, as it becomes hard to move money from India if you are not there.
Is there something he can move something on his close relatives to avoid hassle such as managing from here, paying additional taxes etc
Yes. He can sell stocks, pay Indian tax on the gains/losses and then let trusted relative buy them with his money. He should transfer as much assets to his relatives as he can before moving. Also he is not allowed to have regular bank accounts and demat/trading accounts in India as soon as he moves as per Indian law. He needs to convert his bank account to NRE/NRO and it's easier to do in person from India. Consolidate all bank accounts into one major bank. Then go to bank and convert it to NRE/NRO. Transfer as much assets as he can to relatives so relative will pay Indian tax but tax filing in US becomes easier. US taxes GLOBAL income. So any gains get taxed (all Indian assets, all NRE/NRO interest, etc.)
He should invest in a wife. don't come here without one.
How is it related, he is married though..
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Yea please stop , we rednecks like to party alone and marry our cousins .