308. Green card holder

declaring Indian income for US

taxes

Q: Kind attn: Mr. V.K. Chand I am 71 year old having taxable income and I am filing returns and paying taxes in India regularly. Lately I have become a US green card holder helping my daughter with kids and I do not have any dollar income. I propose to visit India for at least 5 months every year. While it may be necessary to pay taxes as one who has not stayed for 182 days in India (seek your views on this), am I violating any law if I do not declare this fact to banks as that would mean withholding of 30% of interest earning by banks to be claimed as refunds. There is no specific regulation under FEMA which talks about declaration on obtaining green card or changed status to non resident. There is no specific requirement in Income tax asking to intimate once the green card is obtained. Even the banks and other department do not have any say on obtaining green card. Also is it in order to buy air tickets from India for my travel from USA to India and back as I can pay online from my bank accounts in India Would appreciate your considered views . Regards Rajan A. Banks may not be concerned with your green card status, however, RBI regulations also have to be considered. There are a few things that you should be aware of: 1. As a green card holder living in the United States, your status in India is that of a non- resident. Non-residents cannot maintain normal bank accounts in India and must notify their bank of the change in status so that their bank accounts can be designated as non-resident accounts, for example, NRO or NRE accounts. 2. Banks are obligated to deduct TDS on NRO accounts. NRE accounts are exempted. 3. Even though you are currently not a US. citizen, Once you get a green card, you automatically become a US. tax resident and you must declare your worldwide income to the US. government. It does not matter if a portion or all of that income was earned in India. Green card holders must file US. tax return Form 1040 each year by April 15th. Just because you must file a US. tax return does not automatically mean that you will have to pay tax in USA on your income in India, International treaties control whether or not you must pay US. taxes on income earned elsewhere. India and USA have Double Taxation Avoidance Agreements (DTAA ) with each other. Some people get the wrong impression that the number of days you spend in the United States each year determines whether or not you are a tax resident. However, this is true only for people who have non-immigrant visas. Green card is NOT a non-immigrant visa. Green card holders, who fail to declare their worldwide income may risk the possibility of their green card being revoked. 4. You should have no trouble buying air travel tickets online using your Indian bank account provided the starting point for your flight originates in India, for example travel from India to USA and return to India. For travel where the initial departure is from USA you may have problems. Ticket agents have to abide by IATA regulations.