Green-Card suspension: What happens to investments on returning to India?
What's the story
The Trump administration has suspended several tech giants including Microsoft, Infosys, Cognizant, Tata, Wipro, HCL Technologies, Capgemini and Adobe from the Permanent Labor Certification Program (PERM). This could affect Indian tech professionals on H-1B visas seeking permanent residency through employer sponsorship. So, what happens to their investments if they return to India? Let's find out.
Visa implications
H-1B visa holders may face Green Card delays
The suspension of the PERM program could disrupt the Green Card process for H-1B visa holders.
However, the long-term impact will depend on the duration of these suspensions and how the US government handles affected applications.
An H-1B visa allows foreign workers to stay in America for up to six years, with an initial period of up to three years and an extension of another three years.
Retirement planning
Managing US retirement accounts from India
If the suspension forces an Indian worker to return home, they may still have to manage their US retirement accounts, tax obligations, investments and property from India.
Leaving the US doesn't automatically mean closing a 401(k), the retirement savings account most US employers offer.
Workers can either keep their money in their employer's plan or transfer it to an Individual Retirement Account (IRA).
Tax management
Tax implications of withdrawal
Withdrawals before age 59.5 incur 10% additional US tax, unless an exception applies.
However, a lower tax rate under the India-US tax treaty can apply to regular pension payments received by an Indian resident if one submits Form W-8BEN.
Section 158 of the Indian Income-tax Act, 2025 provides an option to defer taxation of eligible foreign retirement account earnings until withdrawal.
Individuals meeting conditions can file Form 40 by applicable income-tax return due date, aligning Indian taxation with US timing.
Investment oversight
What about other investments?
A person returning to India can continue holding their US bank deposits, shares, brokerage investments or real estate.
However, banks and investment platforms may require updated documentation or tax forms.
Interest, dividends, rental income and asset sales could trigger tax obligations.
US real estate can generally be held from India, but rental income, property taxes management obligations and US tax filings remain necessary despite the change of residence.