US green-card programme suspension: The United States has again stitched on its aggressive cut-down technique. The Trump administration has surprisingly suspended 8 major giant tech companies from the US government’s Permanent Labour Certification (PERM) programme.
The list includes Microsoft, Infosys, Cognizant, Tata, Wipro, HCL Technologies, Capgemini and Adobe as well. This suspension move is set to affect the green-card applications of eligible foreign workers sponsored by these employers.
Although the existing H-1B visas are not going to be automatically cancelled, the suspension will create uncertainty around permanent residency.
For Indian professionals considering a return home, the challenge goes beyond immigration paperwork. From 401(k) retirement savings and US stocks to bank accounts and property, understanding tax rules and financial obligations is essential to managing their assets responsibly.
Let's decode the matters behind this today for you all to understand how these things work and impact.
What Is A 401(k) Retirement Account?
A 401(k) account is usually a savings account in the US which is offered by the employer to the employees. All the employees who hold this account contribute a portion of their salary to this account, and some amount is submitted by the employer. This is almost the same as the PF account structure working in India.
The money is generally invested to help employees build savings for their retirement. These savings usually receive tax benefits under US law.
Returning to India does not automatically mean workers must close their 401(k) accounts. However, they should understand the withdrawal rules and available options.
What Will Happen To Your 401 (K) Retirement Account?
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Keep the account: Workers can generally leave their savings invested in their existing employer’s plan, subject to the plan’s rules. Their money can continue growing through investments.
Withdraw money early: Withdrawals before age 59½ may attract an additional 10% US tax, apart from applicable income taxes. Certain exceptions may apply.
Transfer savings: Eligible workers may transfer their savings to an Individual Retirement Account (IRA), subject to applicable rules. This can help them continue managing their retirement funds after returning to India.
What Happens To US Stocks And Brokerage Accounts?
Can Indians invest in the US stock market? First, to clear your curiosity, yes, Indian residents working in the US can invest in US stocks through permitted routes, subject to RBI rules, foreign exchange regulations and applicable tax requirements.
The US stock market accounts allow individuals to invest in company shares and other financial assets. All the Indian professionals working in the US use these accounts to build wealth and assets; this also gives them returns.
But what happens when they return to India? The good news is that they can generally continue holding their US investments, subject to brokerage policies and applicable regulations. However, updating account details and understanding tax rules are essential. After all, moving countries does not mean your investments move out of the picture!
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Update tax details: Eligible non-US investors may need to submit Form W-8BEN to establish their foreign tax status.
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Understand dividend taxes: US dividends paid to non-residents generally face 30% withholding tax, unless a lower treaty rate applies.
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Check Indian tax rules: Once an individual qualifies as a tax resident of India, foreign income and assets may need to be reported under applicable Indian tax rules.
Can You Keep Your US Property After Returning To India?
So, as an Indian with the mentality of buying a house as an asset, there are many Indians who have bought a house for longer-term planning. Owning a house in the US does not mean you will have to sell it when returning to India.
On a lighter note, you should understand the tax rules, maintenance costs and legal responsibilities that continue even after relocating.
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Keep the property: You can generally continue owning your US home.
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Earn rental income: Rent may be subject to US taxes and filing requirements.
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Sell the property: FIRPTA may require tax withholding when foreign owners sell US real estate.
What Happens to US Bank Accounts?
And last but not the least, you might also think about what will happen to your US bank account. To ease your confusion, people returning to India may be able to retain their US bank accounts, depending on the bank’s policies.
Everyone returning should update their residential address, tax details and other required documents.
Indian banking rules also shall also be kept in mind and need attention. If a person’s residential status changes under Indian foreign exchange regulations, they may need to redesignate their existing resident savings accounts as Non-Resident Ordinary (NRO) accounts. NRE accounts may be useful for eligible non-residents managing overseas earnings in India.
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Key Area
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What You Need to Know
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US bank accounts
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You may be able to retain your US bank account, depending on the bank’s policies.
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Update details
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Update your residential address, tax details and other required documents.
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Indian savings accounts
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If your residential status changes, you may need to redesignate your resident savings account as an NRO account.
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NRE accounts
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Eligible non-residents may use NRE accounts to manage eligible foreign earnings in India.
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Disclaimer: This article is intended for educational and informational purposes only. It provides a general overview of how US assets, investments and tax rules may work for Indians returning home. Please consult qualified financial, tax or legal professionals for advice specific to your situation.