Moving to India while you keep your green card sounds simple. You settle in and assume the US chapter is on pause. It is not. The moment you land in India with a valid green card, the IRS still considers you a US tax resident and a new set of rules kicks in on both sides of the border.
This guide explains what it means to keep your green card after moving to India, what it costs in taxes and compliance, and when surrendering it might be the smarter move.
How Long Can a Green Card Holder Stay in India?
For an Indian citizen, India sets no limit on the stay itself. The limits that matter come from the US side, plus India's tax residency rules:
- Under 6 months away: brief trips abroad generally do not affect your permanent resident status, although absences of 6 months or more may disrupt the continuous residence you need to apply for US citizenship later.
- Up to 1 year away: your green card works as a re-entry document only after an absence of less than 1 year. Abandonment can still be found on a shorter trip if the US no longer looks like your permanent home.
- More than 1 year away: USCIS uses an absence of more than a year as a general guide for abandonment. A re-entry permit (Form I-131), applied for before you leave, is generally valid for up to 2 years.
- More than 2 years away: any re-entry permit will have expired, and you would generally need a returning resident (SB-1) visa from a US embassy or consulate.
- On the tax side: 182 days or more in India in a financial year makes you an Indian tax resident (shorter stays can too, as explained below), while the US keeps taxing you on worldwide income for as long as you hold the card.
If you are a US citizen rather than a green card holder, there is no abandonment question, but the tax position is similar: the IRS taxes US citizens living abroad on their worldwide income, and the same Indian day-count tests decide whether India taxes you as a resident.
What Happens to Your Green Card When You Move to India?
Moving abroad does not automatically cancel your green card. You are a lawful permanent resident (LPR) of the United States, and that status stays with you unless you formally give it up or USCIS terminates it. The catch is continuous residence, the idea that the US is still your primary home.
How Abandonment Is Judged
USCIS does not set a fixed number of days you must spend in the US each year. The question is whether you intended the US to remain your permanent home. An officer may look at whether your trip was meant to be temporary, whether you kept US family and community ties, US employment, a US mailing address, US bank accounts and a valid US driver's license, whether you own property or run a business in the US, and whether you filed US income taxes as a resident.
Crossing the one-year mark does not end your status by itself, but it puts your intent squarely in question. That is a difficult argument to win if you sold your US home, moved your family to India, and took a full-time job there.
How to Protect Your Status with a Re-Entry Permit
If you plan to spend more than a year in India but want to keep your green card, apply for a re-entry permit on Form I-131 before you leave. Federal rules require you to be in the US when you file, so you cannot apply from India. A re-entry permit is generally valid for 2 years from the date it is issued (1 year if you have spent more than 4 of the last 5 years outside the US), and it cannot be extended. It lets you return without a returning resident visa and helps show your absence was temporary, though it does not guarantee entry.
What Is Form I-407?
Form I-407 is the form for voluntarily recording that you have given up your green card. Border officers sometimes present it to returning residents who have been abroad for a long time. Signing is voluntary: the form itself states that US law does not require you to sign it, and you can ask for a hearing before an immigration judge if you disagree that you abandoned your status. If you do sign, you give up your lawful permanent resident status. Never sign under pressure without speaking to an immigration attorney.
US Tax Obligations When You Keep Your Green Card After Moving to India
This is where most people get surprised. Keeping your green card after moving to India does not put your US taxes on hold. It actually creates a parallel set of US tax obligations that run alongside whatever you owe in India.
You Are Still a US Tax Resident
The IRS treats green card holders the same as US citizens for tax purposes. You are a US tax resident from the day you received your green card until you formally surrender it. There is no exception for living abroad.
Filing Form 1040 on Worldwide Income
As a US tax resident, you must file Form 1040 every year and report all income from every source. That includes your salary from an Indian employer, rental income from Indian property, dividends from Indian mutual funds, and capital gains on Indian assets. Your Indian income does not get a pass because it was never touched by the US banking system.
Foreign Earned Income Exclusion and Foreign Tax Credit
Two tools reduce or eliminate double taxation for most green card holders in India.
The Foreign Earned Income Exclusion (FEIE) lets you exclude up to $132,900 of foreign-earned income from your US taxable income for 2026. To qualify, you must meet either the bona fide residence test or the physical presence test (330 days outside the US in a 12-month period).
The Foreign Tax Credit (FTC) gives you a dollar-for-dollar credit for income taxes paid to India. If your Indian tax rate is higher than your US rate, the credit can wipe out your US tax liability entirely. Most green card holders in India owe little or no US tax after applying these tools. But the filing obligation remains.
DTAA Tie-Breaker Rules and Form 8833
If you become a resident of India for a financial year, for example by spending 182 days or more there, India can tax you too. Once you are Resident and Ordinarily Resident (ROR) rather than RNOR, India taxes your global income. This creates a dual-residency situation where both countries claim the right to tax you.
The US-India tax treaty, called the DTAA, resolves this. Article 4 contains tie-breaker rules that determine which country gets primary taxing rights. The tests look at where your permanent home is, where your centre of vital interests lies, and where you have your habitual abode.
If the tie-breaker rules place you in India, you can file your US return as a non-resident and report only US-sourced income. To do this, you must attach Form 8833 (Treaty-Based Return Position Disclosure) to your US return. Failing to disclose a treaty-based return position can trigger a $1,000 penalty for each undisclosed position, and it is one of the most commonly overlooked steps in this situation.
A warning for long-term residents: if you have held your green card in at least 8 of the last 15 tax years, claiming treaty residence in India can itself count as giving up your green card for tax purposes. The IRS treats a long-term resident as no longer a lawful permanent resident once they start being treated as a resident of a foreign country under a tax treaty, do not waive the treaty benefits, and notify the IRS on Forms 8833 and 8854. That makes the claim an expatriation, so the exit tax rules below can apply even though you still hold the card. Filing as a treaty non-resident also removes one of the factors USCIS weighs when deciding whether you kept the US as your permanent home: filing US income taxes as a resident.
FBAR and FATCA: Reporting Your Indian Accounts to the IRS
Even if you use the DTAA tie-breaker to limit your US taxable income, you still have to report your Indian financial accounts to the US government. These are information reporting rules, not tax rules. They apply regardless of whether you owe any US tax.
FBAR Filing Requirements
If the combined balance of your Indian financial accounts, including bank accounts, fixed deposits, NRE accounts, and NRO accounts, exceeded $10,000 at any point during the calendar year, you must file an FBAR. The full name is FinCEN Form 114, filed online through the FinCEN portal, not with your tax return. The deadline is April 15, with an automatic extension to October 15. Penalties for non-willful violations can reach a statutory maximum of $10,000 per violation, adjusted annually for inflation; FinCEN's current adjusted maximum is $16,536 for penalties assessed on or after January 17, 2025. See our FBAR filing guide for the full process and deadlines.
FATCA Form 8938 Thresholds
FATCA adds another layer. If you are a single filer living abroad and your total foreign assets exceed $200,000 at year-end (or $300,000 at any point during the year), you must file Form 8938 with your federal tax return. For married couples filing jointly, the thresholds are $400,000 at year-end or $600,000 at any point during the year. Your FATCA obligations cover a wider range of assets than FBAR, including interests in foreign entities and certain insurance policies.
Indian Tax Implications If You Still Hold a Green Card
Your green card status does not change how India treats you for tax purposes. India looks at where you physically live, not what documents you carry.
Your Residential Status in India Under the Income Tax Act
India decides your residential status each financial year (April to March) by counting the days you are physically in India. You are a resident if you spend 182 days or more in India, or 60 days or more in the year plus 365 days or more over the previous four years. If you are an Indian citizen or person of Indian origin who is only visiting India, the 60-day test is replaced by 182 days, or by 120 days when your total income other than from foreign sources exceeds Rs 15 lakh, and anyone who is resident only because of that 120-day test is always treated as RNOR. An Indian citizen with that level of income who is not liable to tax in any other country can also be deemed resident. Our guide to the 120-day and 182-day rules explains how these tests interact.
Being resident does not automatically make you ROR. You are Resident but Not Ordinarily Resident (RNOR) if you were a non-resident in 9 of the 10 preceding financial years, or if you spent 729 days or fewer in India during the preceding 7 years. If neither applies, you are Resident and Ordinarily Resident (ROR), and India taxes your global income, including your US salary and capital gains from US assets. This is where the dual-residency problem becomes real.
RNOR status is the transitional benefit for people who recently returned. It can shield most of your foreign income from Indian tax for up to 3 financial years after a long stay abroad, depending on your past days in India.
NRE and NRO Account Rules Under FEMA
India's foreign exchange rules under FEMA also change when you move back. Under RBI rules, your NRE (Non-Resident External) accounts should be redesignated as resident accounts, or the funds moved to a Resident Foreign Currency (RFC) account, as soon as you return to India to take up employment or your residential status otherwise changes. The tax-free interest on NRE accounts only applies while you hold NRI status. Interest earned after you become a resident is taxable.
Your NRO account, which holds India-sourced income like rent and dividends, may likewise be redesignated as a resident account once you return to stay in India for an uncertain period. The facility to repatriate up to USD 1 million per financial year from NRO balances, after applicable taxes, is available to NRIs and PIOs, so it matters mainly while you are still a non-resident under FEMA.
What If You Surrender Your Green Card? The Exit Tax Explained
Surrendering your green card stops your US tax residency from the date you file Form I-407, with your green card attached, with USCIS or a US consular officer. But if you have held the green card for a long time, the IRS may want a parting payment first.
Who Qualifies as a Long-Term Resident?
You are a long-term resident if you held your green card for at least 8 of the last 15 tax years. If you fall into this category, surrendering your green card is treated as expatriation under IRC Section 877A, the same law that applies to US citizens who renounce their citizenship.
The Three Covered Expatriate Tests for 2026
You become a covered expatriate, meaning the exit tax applies, if you meet any one of these tests:
- Net worth of $2 million or more on the surrender date.
- Average annual net income tax above $211,000 (the 2026 threshold) for the 5 years before expatriation.
- Failure to certify 5 years of US tax compliance on Form 8854.
The third test catches people who assumed they were below the financial thresholds but had unfiled returns or unpaid taxes.
How the Exit Tax Is Calculated
If you are a covered expatriate, the IRS applies a mark-to-market rule: it assumes you sold all your worldwide assets the day before surrender. Any net gain above $910,000 (the 2026 exclusion, per IRS Rev. Proc. 2025-32) is taxed as capital gain in your final US return. Retirement accounts are carved out of the mark-to-market calculation and follow their own rules: an IRA is treated as fully distributed the day before you expatriate, while eligible deferred compensation can instead be subject to 30% withholding on later payments if you file Form W-8CE and waive any treaty reduction in withholding. If you also hold Indian mutual funds, the PFIC rules add their own reporting, which our guide to PFIC compliance for green card holders explains.
For example: Rahul holds his green card for 10 years and surrenders in 2026. His net worth is $2.5 million, making him a covered expatriate. His worldwide assets carry $1.4 million in unrealised gains. After the $910,000 exclusion, he owes tax on $490,000 at a 20% rate, a $98,000 exit tax bill.
| Factor | Keep Green Card | Surrender Green Card |
|---|---|---|
| US tax residency | Continues until formal surrender | Ends on the date you file Form I-407 |
| Annual US tax filing | Form 1040, worldwide income | Final Form 1040 + Form 8854 |
| FBAR and FATCA | Required every year | Not required after surrender |
| Indian tax residency | Determined by days in India | Determined by days in India |
| Exit tax risk | Not applicable | Applies if long-term resident + covered expatriate tests met |
| Return to the US | Can re-enter as LPR | Must apply for a visa |
| Annual compliance cost | Recurring every year (US return, FBAR, FATCA) | One-time exit cost, then lower |
Three Questions to Ask Before You Decide
Neither option is automatically right. It depends on your situation.
How long do you plan to stay?
For a 1-2 year stint with plans to return, keeping the green card makes sense. For a permanent move, the annual compliance cost starts to outweigh the benefit.
Are you a long-term resident with significant assets?
If you have held the green card for 8 or more of the last 15 years and your net worth is $2 million or more, this is a tax planning question, not just a lifestyle one. Timing your surrender carefully can make a meaningful difference.
Do you plan to return to the US?
Surrendering is permanent. If there is any realistic chance you will want to live or work in the US again, the re-entry permit preserves your options far better.
Conclusion
You can legally keep your green card after moving to India, but the IRS travels with you. Worldwide income reporting, annual tax filing, FBAR and FATCA compliance, and potential exit tax exposure all come with the territory. For most people who plan to return to the US, the compliance cost is worth it.
For those making a permanent move, especially long-term residents with significant wealth, a planned surrender may make more financial sense. Either way, get a cross-border tax advisor involved before you decide.
Frequently asked questions
Can my green card be taken away if I don't visit the US regularly?
Your green card is not automatically cancelled for staying abroad too long, but prolonged absences put it at risk. Abandonment turns on whether you intended to keep the US as your permanent home, and USCIS uses an absence of more than a year as a general guide. After an absence of a year or more, your green card alone is no longer a valid re-entry document. A re-entry permit, obtained before you leave, is the most effective way to protect your status for extended stays abroad.
Do I need to pay US taxes on income I earn in India while holding a green card?
Yes. The IRS treats green card holders as US tax residents and requires you to report worldwide income on Form 1040 every year, including your Indian salary, rental income, and investment gains.
However, the Foreign Earned Income Exclusion (up to $132,900 for 2026) and the Foreign Tax Credit can reduce or eliminate your actual tax liability. Most green card holders in India owe little or no additional US tax after applying these tools, but the filing obligation remains. Our guide on filing US and Indian taxes after moving back walks through the year you move.
What is the exit tax and how is it calculated for green card holders?
The exit tax applies only to long-term residents, those who held the green card for at least 8 of the last 15 tax years, who meet any of the three covered expatriate tests: net worth of $2 million or more, average annual net income tax over $211,000 (2026 threshold), or failure to certify 5 years of tax compliance.
The IRS applies a mark-to-market rule, treating your assets as sold the day before surrender. Net gains above the $910,000 exclusion (for 2026) are taxed in your final return. You file Form 8854 to report the calculation.
How do I surrender my green card if I am already living in India?
You file Form I-407, Record of Abandonment of Lawful Permanent Resident Status. USCIS asks you to mail it, with your green card, to its facility in Lee's Summit, Missouri. In rare cases a USCIS international field office or a US embassy or consulate may accept it in person if you need immediate proof, and you can also hand it to a CBP officer at a US port of entry. USCIS shares your name and filing date with the IRS, and for tax purposes your resident status ends when you file. If you are a long-term resident, attach Form 8854 to your income tax return for the year you expatriate.