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Level 1

Question

I (resident alien) have a Public Provident Fund (PPF) account in India. Do I have to report this account and the interest earned in this account in my US tax return?

Forum|Forum|7 years ago
June 3, 2019
3 replies
55 views

For information, PPF is a tax-free retirement account in India (like 401k in US), i.e. any interest earned in this account is considered tax free in India.

TurboTax Free Edition Online

Level 15

sahababu, as I understand the providend fund scheme, it grows and is available to you only when you retire --- the earnings are tax free but only at distribution time. By that logic, I do not believe you have to declare and / or pay taxes on the earnings in the USA. However, if your long term plan is to settle down in the USA and retire here, it may be worth considering whether it is advantegous to you to declare the earnings now and get it out of the way.

Also note that if the amount is large enough >= US$90K, and depending on your filing status, there may be FATCA reporting requirement.

Is there anything else I can help you with ??---pk

Level 2

This answer is incorrect. The US taxes on worldwide income. Unless the vehicle is recognized by the Internal Revenue Service as being the equivalent to a US tax exempt vehicle it should be reported on the US return. The Times of India had a very informative article on PPF's on November 16, 2017
<a rel="nofollow" target="_blank" href="https://timesofindia.indiatimes.com/business/faqs/provident-fund-faqs/FAQs-All-about-PPF-accounts-for-NRIs/articleshow/10569464.cms">https://timesofindia.indiatimes.com/business/faqs/provident-fund-faqs/FAQs-All-about-PPF-accounts-for-NRIs/articleshow/10569464.cms</a>