India–US Tax Guide for Indians Working in the US on Visas

H-1B, L-1 and other visa holders: understand tax residency, Indian income, foreign-account reporting and the records needed for coordinated India–US advice.

Guidance checked: 14 November 2026. For Indians working in the United States on H-1B, L-1 or other visas, including people who changed from student status to employment. This is an orientation and document checklist, not a determination of residency, an immigration opinion or preparation of two official returns.

You may have obligations in both countries—not necessarily two returns

A US work visa does not, by itself, determine tax residency in either country. Work out each country’s residency and income rules separately, then check whether a return or information report is required. Living in the US does not automatically remove Indian obligations, and holding an Indian passport does not automatically make you an Indian tax resident. The IRS H-1B guidance distinguishes immigration status from tax residency; the Indian residential-status guide describes India’s separate tests.

Step 1: Establish US tax residency

The US substantial presence test generally requires at least 31 days in the current calendar year and 183 weighted days across three years: all countable current-year days, one-third of the preceding year’s days and one-sixth of the year before that. Day exclusions, the green-card test, closer-connection exceptions and treaty positions can change the conclusion. H-1B days generally count; people who previously held F-1 or J-1 status need to check whether any earlier days were excluded. “Exempt individual” in this context can mean exempt from counting days, not exempt from all income tax. IRS substantial presence test.

A resident alien is generally taxed on worldwide income. Nonresident-alien rules differ and commonly involve Form 1040-NR rather than Form 1040. An arrival or departure year can involve dual-status rules. Do not choose a return solely from your visa label or assume a full-year resident’s deductions apply. IRS H-1B tax guidance.

Step 2: Establish Indian residency for the correct period

India tests residency separately for each earning year, with resident and ordinarily resident, resident but not ordinarily resident and nonresident classifications. A citizen leaving India for overseas employment has a special day-count rule; visiting India, higher Indian income and deemed-residency conditions can require different analysis. A simple “under 182 days means NRI” shortcut is not reliable in every situation. The Department confirms that the special overseas-employment relaxation continues under the new Act. Indian nonresident FAQs.

An ordinarily resident individual’s Indian taxable scope generally includes worldwide income; RNOR and nonresident scopes differ. Indian rent, interest, gains or other income can still need assessment even while you work abroad. Do not assume money is taxable merely because it was transferred, or exempt merely because it remains in another country. Department residential-status guidance.

Step 3: Align different tax calendars

The US normally uses the calendar year, January to December. India uses an April-to-March earning period. FY 2025-26 income is filed as AY 2026-27 under the Income-tax Act, 1961. Income from 1 April 2026 is in Tax Year 2026-27 under the Income-tax Act, 2025. The similar labels do not describe identical earning periods. Read our India Act transition guide and the Department’s transition FAQs.

Build a dated income ledger rather than copying a total from one return into the other. Keep the original currency, payment date, applicable conversion records and evidence of tax paid. A visa change or move during the year can make the overlap especially important.

Step 4: Check Indian accounts and investments for US reporting

For a US person within the applicable reporting rules, FBAR can be required when the aggregate value of foreign financial accounts exceeds $10,000 at any time during the calendar year. This is an aggregate threshold, not $10,000 per account, and it is not based solely on interest earned. Financial interest and signature authority must be considered. FBAR is filed separately with FinCEN, not attached to Form 1040. IRS foreign-account guidance.

Form 8938 is a separate test covering specified foreign financial assets and different thresholds based on filing status and where you live. Filing one report does not replace the other. Review Indian bank and investment accounts, including NRE/NRO accounts, even if their Indian tax treatment seems favorable. Foreign investments and retirement arrangements may require additional analysis; this checklist does not decide their US classification or guarantee an exemption. IRS comparison of Form 8938 and FBAR.

Step 5: Check double-tax relief—not a blanket exemption

The India–US treaty and domestic foreign-tax-credit rules may reduce double taxation where their conditions are met. They do not mean you can automatically omit income, skip a return or credit every amount withheld abroad. Residency, income sourcing, category limits, timing and treaty provisions matter. US individual foreign tax credits commonly involve Form 1116, subject to exceptions and limitations. India’s credit or treaty claims need separate supporting documentation and applicable forms. IRS foreign tax credit guidance and the official India–US treaty.

Federal treaty treatment does not settle US state taxation. Review the state or states where you live or work and whether they follow the relevant federal treatment. Get coordinated advice rather than assuming both countries or all states reach the same result.

Records to gather before speaking with an adviser

Travel dates for the current and relevant earlier years, plus visa/status-change dates and supporting entry records.
US Forms W-2 and relevant 1099s, pay statements, stock-compensation records and prior federal/state returns.
Indian Form 16 or 16A, AIS/TIS, Form 26AS and income-tax returns.
Indian bank interest certificates, rent records, investment transactions and account-value records needed for foreign reporting.
Tax payment challans, withholding certificates and evidence of foreign taxes paid or accrued.
Filing status, spouse/dependent information and any prior residency elections or treaty claims. Keep identifiers such as PAN, SSN, passport numbers and account numbers out of general chat unless genuinely needed. Chat and uploaded documents are sent for remote AI processing; filing records saved in Tax CoPilot remain in your browser.

How Tax CoPilot fits

Use this guide to organize questions and documents, then ask about India–US tax considerations. Tax CoPilot’s India calculator is limited to supported ordinary-income AY 2026-27 cases. It does not compute coordinated dual-country returns, determine treaty residency, prepare FBAR/Form 8938, or file Form 1040-NR or immigration forms. Cross-border income and accounts need a qualified India–US tax adviser; a preparation draft is not an official return.

Official sources

Rules depend on the tax year and individual facts. Verify current official instructions and get professional advice before taking a filing or treaty position.