501. US Citizen living in India

filling US taxes from India on

pension income

Question: I am 66years old and recently I became us citizen. I never worked in usa and no earning as such I never filed income tax return there. I retired from service in India and having PAN card. My retirement benifit is in ordinary bank account in india. I recently moved to India and planing to stay here as i am having OCI status. I have no planing to work in India. In view of above fact I want following clarification; 1.Can I continue old bank account as resident indian? 2.Is usa (IRS) is to be informed for my old bank deposit (retirement benifit)? 3.Can I form private trust making minor grand children(usa citizen) as benificiary? Thanks jldas Answer: Regards to your questions: 1. As an OCI holder, if you have decided to settle down and live in India, then you can have a ordinary resident account. Even if you make the occasional short term trip to USA, but continue to live in India a resident bank account should be fine. On the other hand, if you continue to spend the bulk of your time in USA and visit India occasionally, then you would have to re- designate your account as NRO and your pension income can be deposited in your NRO account. To clarify further, even a foreigner who is settled down and living in India permanently for a period of time, can have a resident Indian bank account. Non- Residents cannot have resident bank accounts. Your bank should be able to advise you. 2. The rules for filing taxes in the United States are the same for US citizens whether they live in USA or live abroad. Whether a person has to file a tax return in USA or not depends on the persons age and income. Even though the IRS requires that all worldwide income be declared when filling US taxes, generally, a person who is over 65 years of age or older must file a return for 2012 if their gross income from worldwide sources is at least $11,200. If your income is $11,200 (convert Rupees to US$) then you must file US taxes and declare your Pension or any other income received by you. The IRS has a very informative website and you can check it if you have any questions regards to filing US taxes. 3. Any person can form a private trust in India if they are of majority age and capable of entering a contract. Since you are a US Citizen and trust beneficiaries would be US citizens, creating a foreign trust may result in filling responsibilities with the IRS.