Do I need to file a US return if I earn only in India?

The question sounds simple, and the answer is "it depends on your US status, not on where the income is earned". The US asks who you are first and where the money came from second.

The short answer by status

US citizens and green card holders in India

The US taxes citizens and residents on income from everywhere, and living abroad does not change that. The filing threshold is tied to the standard deduction for your filing status, and net self-employment earnings of $400 or more require a return regardless of the threshold.

Three things help people living abroad:

• An automatic extension. If you live outside the US on the due date, you have until June 15 to file, with interest still running on any tax due from April 15. Form 4868 extends it further.
• The foreign earned income exclusion (Form 2555). For 2025 you can exclude up to $130,000 of earned income if you meet the bona fide residence test or the physical presence test (330 full days abroad in a 12-month period). It covers wages and self-employment income, not Indian interest, rent or capital gains.
• The foreign tax credit (Form 1116). Indian tax paid on Indian income can be credited against US tax. See the credit article.

You choose between the exclusion and the credit for the same income, and the right choice depends on your Indian tax. Low Indian tax and high pay usually favour the exclusion, high Indian tax the credit.

A green card holder who files as a non-resident under the treaty tie-breaker, or who stops filing, risks problems with the green card itself. Only a formal abandonment or other formal end of the status ends the filing duty. Read the residency article.

Non-resident aliens

A non-resident who has no US income does not have to file. A return is required if you were engaged in a US trade or business, or had US income on which the tax was not fully paid at source.

"I earn only in India" is not always true in the way people mean it:

• Work done in the US is US-source income, whoever pays you. If you work for 10 weeks on assignment in the US for your Indian employer, that pay is generally US-source, and a 1040-NR is the starting point. A treaty exemption can apply to short assignments of up to 183 days, but it has to be claimed on a return, not assumed.
• Remote work from the US for an Indian employer is likewise work done in the US.
• US rent, US dividends or US interest may have been taxed at source. Filing can recover over-withholding.
• F-1 and J-1 students are treated as engaged in a US trade or business, but file only if they have taxable income such as wages or scholarships. They still file Form 8843.

The deadline that is easy to miss

A non-resident return is due on April 15 if you have wages subject to US withholding or a US office, and June 15 otherwise. The IRS also treats a return as timely for claiming deductions and credits if it is filed within 16 months of the due date. After that, a non-resident can lose deductions entirely. Filing late to claim a refund is possible, but it is not the same as filing on time.

Separate from the income tax

Even if you owe no tax, you may owe information filings: FBAR and Form 8938 for Indian accounts, and forms for foreign gifts, foreign trusts and foreign companies. The penalties for missing them are separate from, and often bigger than, the tax.

A quick test

1. Are you a US citizen or green card holder? Then you file.
2. If not, did you count 183 weighted days under the substantial presence test? Then you are a resident, and you file.
3. If not, did you work in the US, or have US income not fully taxed at source? Then you probably file a 1040-NR.
4. If none of these, you probably do not file. Keep the day-count evidence anyway.