Key takeaways
- NRO to US: up to USD 1 million a year after Indian tax, with Forms 145 and 146.
- Gifts or inheritances from India over US$100,000 a year: Form 3520.
- FBAR for Indian accounts over US$10,000; Indian mutual funds are PFICs.
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India to USA: what can go, and how
| Money in India | Can it go abroad? | Limit and paperwork |
|---|---|---|
| NRE or FCNR deposit | Yes, freely | No limit. No Indian tax on NRE interest |
| NRO balance: rent, dividends, pension, savings from before you left | Yes, after Indian tax | Up to USD 1 million per financial year, with Form 145 and usually a CA certificate in Form 146 |
| Sale of a flat or land | Yes, after TDS and tax | Within the USD 1 million. Proceeds of up to two homes bought with foreign money or NRE funds can go back up to the amount you paid. A lower TDS certificate (Form 128) stops excess TDS |
| Inheritance from parents | Yes | Within the USD 1 million, with the will or succession papers. India has no inheritance tax |
| Gift from your parents in India | Yes, they send it under LRS | Up to USD 250,000 per parent per year. TCS of 20% above ₹10 lakh, which they can adjust against their tax |
USA to India: where to send it
| Send it to | Best for | Indian tax |
|---|---|---|
| NRE account | Savings you may want to take back later | Interest tax-free in India (but taxable where you live) |
| NRO account | Paying Indian bills, EMIs, joint use with Indian income | Interest taxable in India, TDS deducted |
| Your parents’ account | Supporting family | Gifts to relatives are not taxed in India |
| Property, mutual funds, shares | Investing in India through NRE or NRO | Gains taxed in India; NRIs cannot buy farm land |
What the US taxes and reports
| Situation | US requirement |
|---|---|
| Gift or inheritance from parents in India over US$100,000 in a year | Form 3520. No tax, but heavy penalties if not filed |
| Indian bank accounts (NRE, NRO, FD) above US$10,000 in total at any time | FBAR (FinCEN 114), and Form 8938 above the FATCA thresholds |
| Indian mutual funds | Treated as PFICs: punitive tax and Form 8621. Get advice before buying more |
| NRE interest, Indian rent, property gains | Taxable in the US, with foreign tax credit for Indian tax |
| You send a gift to your parents above the annual exclusion | You file Form 709; tax is rarely due because of the lifetime exemption |
| Cash or money-order transfers to India | 1% remittance tax since 2026; bank transfers and US cards are exempt. See the 1% remittance tax |
FAST-DS check before 31 December 2026: if you were resident in India in any year while holding a foreign account, shares or RSUs, and they were not in Schedule FA, see FAST-DS for NRIs abroad.
Steps to send money from India
- Pay or settle Indian tax on the money (TDS on rent, interest or property sale).
- Move it to your NRO account if it is not there already.
- Get the CA certificate (Form 146) and file Form 145 online.
- Give your bank the forms, the source documents and its remittance request. It sends the money to your account abroad.
Related: repatriating money from an NRO account, NRE vs NRO vs FCNR, TDS on property sale by NRIs and the free transfer checker.
Sources
- RBI: Master Direction on remittance of assets (USD 1 million limit)
- IRS: About Form 3520
- IRS: Report of Foreign Bank and Financial Accounts (FBAR)
- IRS: Comparison of Form 8938 and FBAR requirements
Frequently asked questions
Do I pay US tax on money my parents send from India?
No. A gift is not income. But if gifts from foreign persons exceed US$100,000 in a year, you must report them on Form 3520.
How much can an NRI in the US repatriate from India?
Up to USD 1 million per financial year from NRO balances, property sale proceeds and inheritance, after Indian tax, with Forms 145 and 146. NRE and FCNR balances have no limit.
Do I need to report Indian bank accounts to the IRS?
Yes. If your foreign accounts exceed US$10,000 in total at any point in the year, file an FBAR; Form 8938 may also apply above the FATCA thresholds.
Are Indian mutual funds a problem for US residents?
Yes. They are generally PFICs for US tax, with punitive tax and Form 8621 reporting. Review them before investing more.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.