I am going to work on H-1B in US for next 3 years. I am sure that I will return to India after 3 years and do not want to permanently settle in US.
In order to invest money in India I am planning to open a PPF account and then invest money in it every year. Since I am not an NRI at present I can open PPF account and NRIs are allowed to invest money in PPF in India so I will be able to invest money every year in it.
I know that interest earned on PPF is tax free in India. But since I will be staying in US for consecutively 3 years I will pass the substantial presence test in US and will be treated as resident alien for tax purposes.
Do I need to pay taxes in US on the interest earned on the PPF?
EDIT The interest is earned by me while in US but cannot be withdrawn. It causes the confusion to pay tax or not and when to pay.