Yes—if your US tax residency began in 2023, correct 2023 onward, claim qualifying Indian tax credits, and use the FBAR’s 25-or-more-account shortcut while keeping full account records.

Exempt individual—student; Form 8843

You will not be an exempt individual as a student if you have been exempt as a teacher, trainee, student, Exchange Visitor, or Cultural Exchange Visitor on an "F, " "J, " "M, " or "Q " visa for any part of more than 5 calendar years, unless you establish to the satisfaction of the IRS that you do not intend to reside permanently in the United States, and you have substantially complied with the requirements of your nonimmigrant status. If you qualify to exclude days of presence as a student, you must file a fully-completed Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition with the IRS.

Substantial presence test

To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: All the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year.

I.A. The substantial presence test

Unless some other exception applies, an H-1B alien must count every day of physical presence in the U.S. for purposes of the Substantial Presence Test.

Resident aliens; Residency starting date; Amended returns

Resident aliens are generally taxed on their worldwide income, the same as U.S. citizens. If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year. If you find changes in your income, deductions, or credits after you mail your return, file Form 1040-X.

First-year choice requirements and starting date

Be present in the United States for at least 31 days in a row in the current year (2025), and Be present in the United States for at least 75% of the number of days following the 31-day period, beginning with the first day of the 31-day period and ending with the last day of the current year (2025). If you make the first-year choice, your residency starting date for the current year (2025) is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. You must attach a statement to Form 1040 to make the first-year choice.

United States resident—IRC 6013 elections

FinCEN clarified in the preamble to the regulations that an election under IRC 6013(g), Election to Treat Nonresident Alien Individual as Resident of the United States, or IRC 6013(h), Joint Return, Etc., for Year in Which Nonresident Alien Becomes Resident of United States, is not considered when determining residency status for FBAR purposes.

Answer

Income from interest on balances standing to the credit of NRE Accounts is exempt from tax under Section 10(4)(ii) . Interest earned in an NRO account is taxable in the hands of the NRI.

Interest income; Certificates of Deposit

In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. If you buy a CD with a maturity of more than 1 year, you must include in income each year a part of the total interest due and report it in the same manner as other OID.

Claiming the credit; Foreign tax credit limit

Unless you qualify for exemption from the foreign tax credit limit, you claim the credit by filing Form 1116 with your U.S. income tax return. Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources.

Refundable taxes

You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable.

Article 11(2)

However, such interest may also be taxed in the Contracting state in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting state, the tax so charged shall not exceed: a) 10 percent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution (including an insurance company); and b) 15 percent of the gross amount of the interest in all other cases.

Financial Account; Item 14a; Record Keeping Requirements

A financial account includes, but is not limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution). Does the filer have a financial interest in 25 or more financial accounts? Do not complete Part II or Part III, but maintain records of the information. Detailed information about each account, including all information called for on this report, must be recorded and retained for five years from April 15th of the year following the calendar year reported, or the date filed if after April 15th.

Who must file; When to file; Filing delinquent FBARs

A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report: a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. If the IRS hasn’t contacted you about a late FBAR and you’re not under civil or criminal investigation by the IRS, you should file late FBARs as soon as possible to keep potential penalties to a minimum.

Part I; Part III, lines 7a and 7b

List each payer’s name and the amount. Check the ‘Yes’ box even if you aren't required to file FinCEN Form 114. Do not attach FinCEN Form 114 to your tax return.

Reporting thresholds for taxpayers living in the United States

If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. If you are married and file a separate income tax return from your spouse, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.

Eligibility criteria

Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law If the IRS has initiated a civil examination of taxpayer's returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the streamlined procedures. Similarly, a taxpayer under criminal investigation by IRS Criminal Investigation is also ineligible to use the streamlined procedures.

Scope and effect; Specific instructions

The Title 26 miscellaneous offshore penalty is equal to 5 percent of the highest aggregate balance/value of the taxpayer’s foreign financial assets that are subject to the miscellaneous offshore penalty during the years in the covered tax return period and the covered FBAR period. For purposes of the 5-percent penalty, the highest aggregate balance/value is determined by aggregating the year-end account balances and year-end asset values of all the foreign financial assets subject to the miscellaneous offshore penalty for each of the years in the covered tax return period and the covered FBAR period and selecting the highest aggregate balance/value from among those years.

Non-residency requirement; Scope and effect

Individuals who are not U.S. citizens or lawful permanent residents, or estates of individuals who were not U.S. citizens or lawful permanent residents, meet the applicable non-residency requirement if, in any one or more of the last three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not meet the substantial presence test of IRC section 7701(b)(3). A taxpayer who is eligible to use these Streamlined Foreign Offshore Procedures and who complies with all of the instructions outlined below will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties.