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Renouncing Us Citizenship And Getting Back Indian Citizenship

Discussion in 'Return to India' started by Thoughtful, Feb 1, 2021.

  1. Thoughtful

    Thoughtful Gold IL'ite

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    Hi All,
    I was curious on if you all knew the consequences of renouncing US Citizenship and getting back Indian citizenship.

    I read somewhere that travel to US after that becomes very difficult.

    The reason I can think of one why someone might need to do is, if you Return to India and still keep US citizenship, you owe dual taxes ( In india and in USA ), which is not worth it if you don't intend to live in USA anymore.

    Anyone thinking along these lines or know of someone who has done this?

    Thanks
     
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  2. MalStrom

    MalStrom IL Hall of Fame

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    Expatriates only need to pay taxes if they earn more than $107,600 in foreign income.
     
  3. Laks09

    Laks09 Staff Member Finest Post Winner

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    I wanted to @Thoughtful. Oopar wala had other plans. The plan was to remain in India, send kids to study in the US and then at retirement age, just denounce citizenship and retire. We came back, have no plans of going back and of course all other plans are shelved. From my personal experience, take the tax filing burden and keep the citizenship. You never know what the course of life will bring you. Never give up your US citizenship if you have kids who are citizens. And don't take US Cit for granted. I did. Learned a very hard lesson. I would have been in such a bad shape without it.
     
  4. Laks09

    Laks09 Staff Member Finest Post Winner

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    You still need to file, even if it income is less than that amount. You cannot hide your foreign investments.
     
    anika987 and Thoughtful like this.
  5. MalStrom

    MalStrom IL Hall of Fame

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    True, but OP seemed concerned with the prospect of paying taxes.
     
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  6. Thoughtful

    Thoughtful Gold IL'ite

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    Thanks for all of your thoughts @Laks09 and @MalStrom.

    My question was a combination of what you all said. To add some more perspective, the question is for the kid as well.

    Will the kid make more than $107K per year in India, will these numbers change where US will ask for tax payments from expats for lesser amount.

    Nonetheless, should he continue to file taxes if the income is less than $107K.

    Does it make sense to have the kid come to US on his own when we live in India.

    All these are kind of running through the mind.

    We kind of got sucked into what you said @Laks09 that its better to have citizenship for us, so we have a way back into the country, particularly 'cos the kid is US citizen.

    Just was wondering if someone had been through this thought process.

    Thanks for the suggestions and thoughts.
     
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  7. Laks09

    Laks09 Staff Member Finest Post Winner

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    It used to be 90ish when I started filing. It does vary depending on US Tax laws. Can a lower amount be taxed in the future? Yes.

    Yes. Any foreign income over $10K (current threshold) should be filed. If he continues to live and work in India and earns an income over the foreign income filing limit, he should file it.

    If finances permitted, that was my plan. I personally would wait and send for PG but that was just a personal preference. I preferred having an 18yrs old in the same country as me.
     
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  8. MalStrom

    MalStrom IL Hall of Fame

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    Less than 10,000 people per year worldwide voluntarily give up their US citizenship. If another Trump-like administration comes into power who knows what negative changes are in store for immigrants? I would not close any doors right now.
     
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  9. chanchitra

    chanchitra Gold IL'ite

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    Following this post for information.
     
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  10. Hopikrishnan

    Hopikrishnan Gold IL'ite

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    the big bold highlight is mine, just to point out there could be UNEARNED (passive) foreign income that is taxable.
    US citizens, Expats or NOT, should REPORT their foreign incomes, no matter how tiny that is in their US tax returns. And then take that big $107,600 deduction for EARNED income; this comes from employment wages in a foreign country.

    If the income reported is UNEARNED, like rents from houses/flats (usually this happens when desi's invest in real estate in India) or interest income from NRE accounts or CD's, all of that do not qualify for foreign income exclusion or deduction; however, these qualify for tax-credits, if taxed by the country where these were earned-unearned incomes.
    Filing income tax returns each year for all USCitizen expats, even if their unearned income is pretty low -- like $12000, and totally under the tax-filing requirement limit, is very important. This generates a happy papertrail for the USC. For such poor people (usually americans retired only on their social security retirement payments) recently US government sent a $600 cheque in the mail (direct deposit to the same US bank account where the SS cheque also goes). And they are potentially going to send another cheque too. There are many in Gujarat and Punjab living on their US social security incomes. Couple of thousand dollars in gift cheques from the Government is sweet for such retirees. Only possible if they have a tax-filing history.

    TAX FILING will be a thing for expats (citizens of one country living in another country) until USA also adopts the world-wide convention on Residency-based-taxation, like all other countries. I am not sure it will happen anytime soon, although there are lobbying efforts by Ameican Citizens Abroad organization.
     
    Last edited: Feb 2, 2021
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