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Here are a few facts before I put in my question:

  • I am a non-resident alien transferring a limited amount ( in dollars post tax) to India every couple of months.
  • I put that money as a fixed deposit in a bank (which gives 6-7 percent annual return)

Now lets say 15 years years from now, I want to transfer all the money accumulated back to my account in USA ( including 6-7 percent interest I earned ).

Questions:

  1. What is the max limit on transferring money back from India to USA?
  2. What are the legitimate ways to transfer the money?
  3. Will there be any tax levied?
  • Where exactly do you have nonresident alien status? That is, are you a noncitizen and nonresident of India in which case you are not allowed to have ordinary savings accounts in India but only NRE And NRO accounts, or are you a nonresident alien (immigration status) in the US but nonetheless a tax resident of the US? Have you been declaring the interest earned by your accounts in India on your US tax returns? Have you been filing the forms with the US Treasury if your foreign assets total $10K or more? – Dilip Sarwate Aug 15 '16 at 23:00
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  1. There is no limit on how much money you can bring into the USA, in Cash or through electronic transfer. You only need to be able to proof or convincingly show that you earned it legally and paid all potential US taxes that you had to pay. If you chose to bring it in cash, you need to tell customs when arriving (and again, be prepared to proof the legal sources).

  2. Wire transfer, cash in the suitcase, whatever you like.

  3. There is no tax for bringing the money, and the tax for making that money supposedly is already paid. Once the money is in the US, and earns more money, you will owe taxes on the gain (not on the capital itself, just on the amounts it increases by)

I hope you understand that if you live in the US, and you have money anywhere in the world, you might need to report it to the IRS; and if your money makes interest anywhere in the world (including of course in India), you might be are required to pay US taxes on the gains. That is independent of your question; but if you don't do it, you are cheating the IRS, and they will ask this when you bring the money back.

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I am a non-resident alien transferring a limited amount ( in dollars post tax) to India every couple of months.

Assuming you are transferring this into an NRE account in India or atleast NRO account in India. As a NRI, by regulations one should not hold normal Savings account. This has to be converted into NRO.

I put that money as a fixed deposit in a bank (which gives 6-7 percent annual return)

Assuming you have FCNR deposits. Also assuming that you are declaring the taxes in your US Tax returns and paying tax accordingly. There is no tax in India on FCNR. If this was in ordinary FD or in NRO account, you are declaring and paying taxes in India as well as in US.

What is the max limit on transferring money back from India to USA?

If you have transferred this into NRE account, there is no limit. Other account there is a limit. Read more at Liberalized Remittance Scheme and here.

What are the legitimate ways to transfer the money?

From India point of view, this has to be Bank to Bank transfers. You can't carry cash [Indian Rupees] outside of India beyond Rs 25000 [or 15000?]. You can't hold excess of USD 250 without valid purpose. Western Union is not authorized to transfer funds out of India.

Will there be any tax levied?

No assuming you are already paying taxes on the Interest in US and depending on the type of account in India.

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