Who this page is for
You're a U.S. citizen or green card holder living and working in India — Bengaluru, Mumbai, Delhi, Hyderabad, Pune, Chennai, or any other city. You likely:
- Earn a salary from an Indian employer (or a U.S. employer on a posting), taxed under the Income Tax Act and withheld via TDS.
- Contribute to EPF (Employees' Provident Fund) as part of payroll.
- Have at least one Indian bank account (savings, salary, NRE/NRO).
- Possibly hold a PPF account, a demat/Indian brokerage account, or mutual fund SIPs.
- May have family members or financial ties in both countries.
Read the full India country guide first if you want the broader treaty and residency picture. This page focuses on which software can file your U.S. return correctly.
The common filing situation for Americans in India
A typical year looks like this: Indian-source salary taxed in India at marginal rates that can reach 30% (plus surcharges and cess), a few Indian bank accounts that together exceed $10,000 at some point in the year, and an EPF balance that's been growing since you started working in India. Your U.S. return will need to cover:
- Form 1040 — the base U.S. return.
- Form 1116 (FTC) — to credit Indian income tax against U.S. tax. For most India-based Americans, this is the election that matters.
- Form 2555 (FEIE) — sometimes useful if your Indian tax is low (for example, in the earliest years when surcharges are smaller) or for specific strategic reasons, but usually not the first choice.
- Form 8938 (FATCA) — above the expat thresholds, which are higher than domestic thresholds ($200,000 single / $400,000 joint at end of year, or $300,000 / $600,000 at any point).
- FinCEN 114 (FBAR) — for Indian bank accounts if aggregate balances cross $10,000.
- EPF reporting — this is where judgment matters (see below).
FEIE vs FTC in India
For most Americans in India, the Foreign Tax Credit is the stronger election because Indian income tax rates on salaried income reach approximately 30% at the top bracket, plus surcharges and cess. That rate typically exceeds the U.S. marginal rate on the same income, so the FTC eliminates U.S. tax entirely and generates carryforward credits you can use in future years.
Scenarios where the FEIE may still be worth considering:
- Your first year in India, where your presence-test qualification might be partial and the FTC math is less favorable.
- You have a mix of U.S.-source and Indian-source income and want to keep Indian-source income clean from U.S. tax.
- You're self-employed with a small business — FEIE stacked with FTC on non-excluded income can be efficient.
Run your actual numbers through the FEIE vs FTC calculator before deciding. The switch is not free — once you revoke the FEIE, you cannot re-elect it for 5 years without IRS consent.
EPF and PPF — the Indian retirement accounts
What this means in practice:
- Your EPF balance counts for FBAR if you have signature authority over it (you do, as the account holder) and the balance crosses $10,000. Software should include it.
- Your EPF balance counts for FATCA (Form 8938) above the expat thresholds.
- EPF income treatment is the judgment call. Some practitioners report interest earned annually as current income; others rely on the U.S.-India tax treaty's pension provisions to defer recognition. Software generally cannot make this call for you.
- PPF is similar but simpler — typically just a foreign financial asset for reporting purposes. No U.S. tax benefit for contributions.
If your EPF balance is small and you're early in your career, software plus professional review is usually fine. If your EPF balance is six figures or you've been in India for many years, a conversation with a U.S. expat CPA familiar with India is worth the cost.
Other Indian complexity U.S. software may miss
- Surcharge and cess — Indian income tax is income tax plus a health and education cess (currently 4%) plus a surcharge at higher income levels. All of it is creditable under the FTC, but the software should ask for the total tax paid including cess and surcharge, not just the base income tax.
- TDS reconciliation — Indian tax withheld at source (TDS) is creditable. If you file Indian income tax returns, your Form 26AS shows the exact amount.
- Demat / mutual fund accounts — these may be PFIC-risky. Indian mutual funds are usually treated as PFICs for U.S. tax purposes. If you hold any, this is the point where you should escalate beyond software. See the software vs CPA page.
- NRE vs NRO accounts — both count for FBAR and FATCA. The software just needs to know the account type and balance; the distinction is tax-relevant for India but not for the U.S. return.
- Tax residency in India — most Americans on long-term assignments become resident for Indian tax purposes, which changes how the Indian side of the return works. This affects the FTC calculation (global income becomes Indian-taxable).
When software is usually enough
For a straightforward case — Indian salary, a few Indian bank accounts, a modest EPF balance, no Indian mutual funds, and no India-side business ownership — expat-specialist software handles everything. That profile fits most of the Americans I know working in India for a few years at a time.
When professional review may make sense
- You hold Indian mutual funds or SIPs (PFIC territory).
- You've been in India long enough that your EPF balance is substantial, and you want a clean position on how to treat its earnings.
- You own Indian real estate as an investment property with rental income.
- You have an Indian business (Pvt Ltd, LLP, sole proprietor) — Form 5471/8865 + PFIC exposure.
- You're planning to return to the U.S. and want to understand the U.S. tax implications of what you leave behind (EPF, real estate, accounts).
Where MyExpatTaxes fits
This page contains affiliate links. If you use them, I may earn a commission at no extra cost to you.
MyExpatTaxes handles the India-specific workflow well: FTC on Indian income tax (including surcharge and cess), FBAR for Indian bank accounts on the same platform, Form 8938 where triggered, and the FEIE vs FTC decision tree structured around Indian income levels. EPF reporting is included; the treatment of EPF earnings is the one area where pairing the software with the professional-review add-on is worth the modest extra fee.
For Americans in India with Indian mutual funds or a foreign business entity, stop and consult a specialist — this is outside what any consumer tax software should handle.
Start with MyExpatTaxes → Full India country guide →
Balanced conclusion
For the typical American on assignment or employment in India, the U.S. filing path is: Form 1040, Form 1116 for the FTC on Indian income tax, FBAR for Indian bank accounts, Form 8938 if you cross the FATCA thresholds, and EPF reported as a foreign financial asset. Expat-specialist software handles all of this; MyExpatTaxes is the consumer product I recommend. For Indian mutual funds, business ownership, or long-tenure EPF positions, escalate to a specialist.
