You can keep Indian investments after moving on a visa or getting a green card, but whether to keep, redeem, or genuinely gift each one depends on when you become a U.S. tax resident and what that particular account holds.
“I moved to the US on a visa. What should I do with my Indian investments like mutual funds (ELSS), NPS, PPF, NSC, LIC, EPFO, and Demat balances? Since U.S. residents are taxed on global income, is there any benefit to keeping these accounts, or is it better to withdraw, gift, or consolidate them? How does this change if I get a green card?”
Resumen
You do not need to liquidate everything at once. The practical hard part is sorting each account by its Indian access rules and its U.S. tax and reporting treatment—especially each mutual fund—before making a transfer.
First separate your U.S. tax-residence year from the decision to keep, redeem, or genuinely give away each Indian asset.
If you do not yet meet the green-card or substantial-presence test, you are generally taxed as a nonresident on relevant U.S.-connected or U.S.-source income rather than automatically on every Indian investment. Count presence using all current-year days, one-third of prior-year days and one-sixth of second-prior-year days; qualifying excluded days can change the result. Keep Indian accounts subject to their own rules while recording values and purchase costs. [IRS substantial-presence test](https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test); [nonresident taxation](https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens).
Once you are a U.S. , report worldwide income and assess Indian assets for the applicable forms. A green card establishes residence even without enough days; if you already met the day test, it does not create a new exemption or a second starting point for worldwide taxation. [IRS resident taxation](https://www.irs.gov/individuals/international-taxpayers/taxation-of-resident-aliens); [green-card rule](https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test); [starting dates](https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates).
Keeping an account can preserve its investment, coverage, or retirement purpose without forcing an early withdrawal: NSCs normally run to five-year maturity; NPS accepts eligible nonresident Indian citizens; PPF has its own maturity and closure rules. But an Indian tax benefit is not by itself a U.S. exemption, and holding accounts may still mean , , or PFIC work. [NSC scheme](https://www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=167); [PFRDA](https://pfrda.org.in/w/faqs/nps-all-citizen-model); [IRS reporting comparison](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements).
You may choose to redeem eligible holdings—often starting by comparing the recurring U.S. reporting burden of each mutual fund with the U.S. tax on its sale—but consolidation is not a tax-free cure: PFIC disposition gains can receive special treatment. For PPF, NSC, EPFO, NPS and LIC, use the actual withdrawal or surrender rules rather than assuming a move or green card unlocks the money. [Form 8621 instructions](https://www.irs.gov/instructions/i8621); [PPF scheme](https://www.indiapost.gov.in/documents/offerings/schemesandservices/posb/PublicProvidentFundScheme2019English.pdf); [EPFO FAQ](https://www.epfindia.gov.in/site_en/FAQ.php).
Do not treat an account still beneficially yours as someone else's simply by renaming it. A real gift changes ownership and can bring U.S. gift-tax reporting; the recipient ordinarily does not receive a fresh fair-market-value basis for gain. [IRS gift-tax rule](https://www.irs.gov/businesses/small-businesses-self-employed/gift-tax); [IRS gifted-property basis](https://www.irs.gov/publications/p551); [Form 709 instructions](https://www.irs.gov/instructions/i709).
Indian regulatory residence, U.S. income-tax residence, and U.S. gift-tax domicile are different questions.
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Watch out for
Próximos pasos
These steps establish your tax starting point, put the Indian accounts in the right status, and separate required filings from optional sales.
Before selling or gifting
Calculate your first U.S. tax-resident year
Apply the IRS [substantial-presence test](https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test): at least 31 U.S. days this year and 183 weighted days across three years, counting all current-year days, one-third of the previous year's, and one-sixth of the second previous year's. Apply the separate [green-card test](https://www.irs.gov/individuals/international-taxpayers/alien-residency-green-card-test) if relevant; the IRS [starting-date rule](https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates) addresses the year you first qualify. If you exclude qualifying presence days, file Form 8843 as the IRS [instructs](https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test); 'exempt individual' describes excluded days, not a blanket income-tax exemption.
Requisitos
Before selecting a product to close
List the accounts and correct your Indian records
Make a separate line for each ELSS or other mutual fund, NPS, PPF, NSC, LIC policy, EPFO account, and Demat holding; retain cost and highest-balance records for U.S. filings. If you have become a person resident outside India under Indian rules, ask your Indian bank to redesignate its existing resident account as an under the [RBI rule](https://www.rbi.org.in/commonman/Upload/English/FAQs/PDFs/Accountresidents16012025.pdf). Give changed address and contact details to the relevant bank, fund, and broker under [SEBI's KYC guidance](https://investor.sebi.gov.in/kyc.html).
Requisitos
After you know the residence date
Decide what to keep or redeem, one product at a time
For each mutual fund or ELSS fund, assess status and any Form 8621 sale consequences under the [IRS instructions](https://www.irs.gov/instructions/i8621); assess direct Demat shares separately. For PPF, compare keeping it to its stated maturity with the [residency-change closure route](https://www.indiapost.gov.in/documents/offerings/schemesandservices/posb/PublicProvidentFundScheme2019English.pdf): after five years from the end of the opening year, submit evidence such as passport and visa or the income-tax return to the account office, accepting the scheme's one-percentage-point interest reduction; do not sign an extension's resident-citizen declaration if it is untrue. For NSCs, apply to the account office on maturity using Form 2; emigration alone is not an [early-closure ground](https://www.nsiindia.gov.in/InternalPage.aspx?Id_Pk=167). Keep NPS if its NRI eligibility serves your purpose; a green card is not the [citizenship-renunciation exit](https://npstrust.org.in/settlement-corpus-closure-nps-account). For an eligible EPFO final claim, use Form 19 through the [EPFO member portal](https://unifiedportal-mem.epfindia.gov.in/memberinterface) when the UAN is linked to Aadhaar and an Indian bank account, or submit the claim to the relevant EPFO office. For LIC, compare the insurance benefit with the cash surrender amount and the [IRS rule](https://www.irs.gov/publications/p525) taxing proceeds above policy cost.
Requisitos
Each applicable tax year
Prepare the U.S. return and separate foreign-account filing
Report Indian income for U.S.-resident periods on your U.S. income-tax return. Attach [Form 8621](https://www.irs.gov/instructions/i8621) for each fund when its PFIC filing rules apply; assess [Form 8938](https://www.irs.gov/instructions/i8938) using the applicable U.S.-resident filing-status thresholds and attach it to the return. If qualifying Indian tax was imposed on the same income, assess a using [Form 1116](https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit)—not an assumed dollar-for-dollar refund. Separately submit the [FBAR online](https://bsaefiling.fincen.gov/file/fbar/html) when aggregate foreign financial accounts exceeded $10,000 at any time: it is due **April 15 after the calendar year**, with an **automatic extension to October 15**. [IRS FBAR instructions](https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar).
Requisitos
Only if those choices arise
Treat gifts and a possible future green-card exit as separate decisions
Before a genuine gift, determine U.S. gift-tax domicile and any [Form 709](https://www.irs.gov/instructions/i709) obligation; preserve the original cost records because [gifted-property basis](https://www.irs.gov/publications/p551) generally carries over for gain. Receiving a green card itself is not an expatriation event. If you later *end* green-card residence after being a lawful permanent resident for at least **8 of the last 15 tax years**, the [Form 8854 long-term-resident rules](https://www.irs.gov/instructions/i8854) become a separate issue; some treaty-residence years are excluded from that count.
Requisitos
Fuentes legales
This answer draws on the IRS and FinCEN reporting instructions, the U.S.–India tax treaty, and RBI, SEBI, India Post, PFRDA, NPS Trust, and EPFO rules.
IRS, Taxation of resident aliens
U.S. income-tax residents report income from India as well as from the United States.
This means that their worldwide income is subject to U.S. tax and must be reported on their U.S. tax return.
IRS, Substantial presence test
The day-count test may make a visa holder a U.S. tax resident before any green card.
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:
IRS, Substantial presence test
Certain qualifying visa-category days are excluded from the residence day count.
Do not count days for which you are an exempt individual.
IRS, Green-card test
A green card is an independent route to U.S. income-tax residence.
You are a resident, for U.S. federal tax purposes, if you are a lawful permanent resident of the United States at any time during the calendar year.
IRS, Taxation of nonresident aliens
A nonresident's U.S. tax treatment differs from worldwide taxation of a resident.
A nonresident alien's income that is subject to U.S. income tax must generally be divided into two categories:
Instructions for Form 8621
A fund needs classification under the actual passive-income or asset tests, not its Indian account label.
Who Must File
A foreign corporation is a PFIC if it meets either the income or asset test described next.
Instructions for Form 8621
Multiple qualifying Indian funds may entail multiple Form 8621 filings.
Who Must File
A **separate** Form 8621 must be filed for each PFIC in which stock is held directly or indirectly.
FinCEN Form 114 / IRS FBAR guidance
FBAR uses an aggregate foreign-account threshold measured throughout the year.
the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
FinCEN Form 114 / IRS FBAR guidance
An FBAR has a separate annual filing date and automatic extension.
The FBAR is an annual report, due April 15 following 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.
Instructions for Form 8938
Form 8938 accompanies the U.S. annual income-tax return rather than replacing FBAR.
When and How To File
Attach Form 8938 to your annual return and file by the due date (including extensions) for that return.
IRS, Form 8938 and FBAR comparison
The IRS lists foreign mutual funds and cash-value foreign life insurance under both foreign-asset reporting regimes.
Types of Foreign Assets and Whether They Are Reportable
|Foreign mutual funds |Yes |Yes | |Foreign-issued life insurance or annuity contract with a cash-value |Yes |Yes |
RBI, Accounts in India by Non-residents FAQ
Indian regulatory nonresidence can require redesignating an existing resident bank account.
Accounts in India by Non-residents
Likewise, when a resident Indian becomes a person resident outside India, his existing resident account should be designated as NRO account.
SEBI, Know Your Customer
Changed address and contact details should be reported to Indian investment intermediaries.
Update KYC Details
**Update KYC Details:** Incase of change in information like address, phone number or other details please inform the respective institutions immediately.
Public Provident Fund Scheme, 2019
India's PPF scheme recognizes changed residence as a potential early-closure ground subject to its other conditions.
Paragraph 13, Premature closure of account
(c) on change in residency status of the account holder on production of copy of Passport and visa or Income- tax return:
National Savings Certificates (VIII Issue) Scheme, 2019
An NSC normally reaches maturity five years after deposit.
Payment on Maturity
The deposit shall mature on completion of five years from the date of the deposit.
National Savings Certificates (VIII Issue) Scheme, 2019
An NSC cannot be cashed out early simply because its holder emigrated.
Premature closure of account
Premature closure of account.-** (1)The account shall not be closed before maturity except in the following cases, namely:-
PFRDA, NPS All Citizen Model FAQ
Nonresident Indian citizens may remain eligible for NPS.
Eligibility
Any Indian Citizen (resident or non-resident) and Overseas Citizen of India (OCI)
PFRDA Regulation 5A / NPS Trust closure guidance
The special NPS account-closure route depends on loss of Indian citizenship without OCI, not U.S. permanent residence.
Settlement of Corpus and Closure of NPS account in case NPS subscriber renounces Indian citizenship and does not hold OCI card
EPFO FAQ, Final settlement
EPFO states its ordinary timing for a final provident-fund settlement.
Final settlement
Final settlement: On retirement or two months after ceasing to be an employee.
IRS Publication 525 (2025)
Surrendering a cash-value life policy can produce taxable U.S. income.
Surrender of policy for cash
If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy.
U.S.–India Income Tax Convention, Article 1
The treaty generally preserves resident-country taxation but has specific enumerated exceptions.
Article 1(3)–(4)
Notwithstanding any provision of the Convention except paragraph 4, a Contracting State may tax its residents (as determined under Article 4 (Residence)), and by reason of citizenship may tax its citizens, as if the Convention had not come into effect.
IRS, Foreign pension and annuity distributions
Foreign pension or annuity payments require a taxable-amount calculation rather than an assumption that the entire payment is exempt.
Just as with domestic pensions or annuities, the taxable amount generally is the Gross Distribution minus the Cost (investment in the contract).
IRS, Foreign tax credit
Qualifying tax actually paid to India on income also subject to U.S. tax may yield U.S. relief.
If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.
IRS, Gift tax
A gift means actually transferring property for less than its value.
The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.
IRS Publication 551, Basis of Assets
A gift generally does not give the recipient a fresh market-value basis for calculating gain.
Property Received as a Gift
Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property.
Instructions for Form 709 (2025)
The U.S. gift-tax analysis cannot be decided from income-tax residence alone.
Nonresident Not a Citizen of the United States
An individual may be a U.S. resident for income tax purposes yet be considered a nonresident for gift tax purposes.
Instructions for Form 8854 (2025)
Long-term green-card holders face a separate reporting analysis if they later terminate that residence.
Long-term resident (LTR) defined
You are an LTR if you were a lawful permanent resident of the United States in at least 8 of the last 15 tax years ending with the year you are no longer treated as a lawful permanent resident.
These are the official rules in the cited publications and instruments as published on the dates shown; rules can change.
This is general information about official processes, not legal advice, and SettleKit is not a law firm.
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