I am planning to r2i next year. I will be eligible for US citizenship this year. Some of my questions are:
- Is it worth going for US citizenship & OCI ? Or is it better to just give everything up and come as normal Indian citizen? The consultant answer is it depends.. Having said that, I will also say, it is a very personal decision. I know there are emotions involved in relinquishing citizenship and acquiring another. I have known folks have hung on to Indian citizenship for this very reason. If you keep that aside, US citizenship & OCI gives you options but comes with little bit more paperwork from a immigration, tax perspective.
- There are lots of info available for OCIs living outside India. Does the same apply to OCI residing in India?In other words is there any advantage to an OCI residing in India? I'm particularly concerned about financial issues.
- If you are an US citizen/OCI residing in India, can you maintain normal bank accounts or does it have to NRE,NRO? You could have regular accounts like other Indian citizens with your OCI. However, you can't trade have a stock trading account as a US citizen.
- Currently NRIs cannot invest in post office bonds etc and it applies to OCIs too. If thats the case does one lose? Not sure, the only exception I have heard is around stock trading accounts.
- Out on tax front if one is an OCI?( as he/she cannot invest in things like NSC etc to reduce tax burden) When you bring back your savings from US back to India what account can you have it in? Well, if I read you correctly, you are talking about the ability to avail tax shelters.. pl. refer to the answer above. The only restriction that I know is around opening stock trading accounts by US citizens.
- Are you treated like a resident of India for income tax purposes if you are US citizen/OCI? I go through a tax consultant (Chartered Accountant) and he takes care of the tax filing in India. As a US citizen you will do US taxes and as a resident of India, you will have to file India tax returns as well.