An Indian resident may send abroad up to USD 250,000 per financial year under the Reserve Bank of India's Liberalized Remittance Scheme, so the $800,000 that a Targeted Employment Area project requires cannot leave India on one person's quota inside a single year. Families bridge the gap by combining the quotas of several adult relatives, or by splitting the transfers across the 31 March financial year boundary. Money already held offshore is a third route. Each of those choices leaves a trail on two continents, because USCIS wants a lawful path for every rupee under 8 CFR 204.6(j) while your bank wants a clean FEMA record for every wire.
The tax planning that matters most has to be finished before anyone lands in the United States as a permanent resident.
A green card makes you taxable on worldwide income from your first day of admission. There is no step-up in basis on the way in. Your Indian mutual funds turn into a punitive US tax category the moment residency begins, and the NRO account you keep for rent collection becomes a reportable foreign financial account.
The LRS ceiling and how families reach $800,000
LRS gives each resident individual, minors included, USD 250,000 per financial year for permitted current and capital account transactions. Four adults in one household therefore clear $1,000,000 on paper. That arithmetic is where most Indian EB-5 funding plans begin, and it is also where they get careless.
RBI has drawn a line between consolidating remittances for family members and clubbing quotas for a capital account transaction the other relatives do not co-own. A father who wires $250,000 straight into a partnership interest held by his son alone is standing on that line. The usual answer is a rupee gift completed inside India first, so that each remitter sends money which has genuinely become theirs and signs their own Form A2 declaration at the bank. Ask an Indian exchange control lawyer to put that opinion in writing. Your US immigration attorney does not carry FEMA risk. You do.
Gifts between defined relatives escape tax in the recipient's hands under section 56(2) of the Income Tax Act. A gift above Rs 50,000 from anyone outside that definition becomes taxable income for the person receiving it. Get the gift deed dated, stamped and matched to a bank transfer rather than to cash.
Your bank also collects tax at source once a remittance passes a threshold. Both the rate and the threshold have been revised more than once, so ask the authorized dealer for the figure that applies on the day the wire goes out. TCS is creditable against your Indian income tax liability, which makes it a cash flow problem rather than a permanent cost.
What goes into an Indian source of funds file
The EB-5 eligibility regulation at 8 CFR 204.6 lists what USCIS expects to see: foreign business registration records, tax returns of any kind filed anywhere in the world during the past five years, evidence identifying any other source of capital, and certified copies of judgments or pending civil and criminal actions against the investor over the past fifteen years.
Indian files usually run on income tax returns, Form 26AS, salary records and bank statements. A technology career paid partly in RSUs documents itself almost automatically. Ancestral agricultural land does not. The sale deed shows a figure, part of the price moved as cash, and nobody wrote down how the balance reached the seller. Where the underlying wealth predates reliable records, say so plainly in the petition and prove the parts that can be proved.
Borrowed money is allowed outright. The statute has expressly permitted gifted and loaned capital for petitions filed on or after 14 May 2022, provided the loan was made in good faith and not arranged to disguise where the money came from. Cash you receive from a loan and then invest counts simply as cash, because USCIS stopped treating invested loan proceeds as indebtedness after Zhang v. USCIS. The collateral rules bite only when the investment is the debt itself, and there you must be personally and primarily liable, your own assets must secure the debt, and the assets of the new commercial enterprise must not. Families mixing gifted and borrowed money should work through our guide to gifted and loaned funds in EB-5 before signing anything, since every donor and every lender has to document a lawful source as thoroughly as the investor does.
When does the US tax clock actually start
Two tests decide it. Under the green card test, worldwide income becomes taxable from the first day you are physically present in the country as a lawful permanent resident. The IRS substantial presence test can catch you well before that, counting days already spent on an H-1B or an L-1. IRS guidance on determining an individual's tax residency status sets out both tests.
Selling appreciated Indian assets before that date is the most valuable single move available to you. The United States taxes the whole gain measured from your original cost, and the India US double taxation avoidance agreement plus a foreign tax credit claimed on Form 1116 will offset only part of the overlap. Calendars work against you as well. India runs its year to 31 March and the IRS runs to 31 December, so credits and income land in mismatched periods.
FBAR, Form 8938 and the accounts you keep in India
File FinCEN Form 114 if your foreign financial accounts together exceed $10,000 at any moment during the calendar year. The threshold is aggregate, so six small NRE and NRO balances count as one number, and the FinCEN guidance on reporting foreign bank and financial accounts is worth reading once in full. Penalties for a willful failure are severe enough to dwarf the tax at stake.
Form 8938 sits on top of the FBAR under FATCA, with thresholds that vary by filing status and by whether you live inside the country. FATCA is also why your bank in Pune started asking for a US taxpayer identification number, since the same law obliges Indian financial institutions to report accounts held by US persons.
Then there is the PFIC trap. Indian mutual funds and unit linked insurance plans are generally passive foreign investment companies in US eyes, and the default regime attaches an interest charge to gains and distributions that can swallow the return outright. Plenty of families liquidate those holdings in the months before residency starts. Treatment of PPF and EPF balances remains genuinely unsettled, and a careful preparer reports rather than assumes.
Concurrent filing depends on a visa number
An Indian national already inside the United States on H-1B or L-1 status may file Form I-485 together with the I-526E, a change introduced by the EB-5 Reform and Integrity Act of 2022. Form I-765 brings an employment authorization document for the spouse. Form I-131 brings advance parole. The condition attached to all of it is easy to miss: a visa number must be immediately available for your chargeability and category on the day of filing, and India's unreserved EB-5 queue has carried a cutoff date while the reserved categories moved on their own schedule. Check the monthly Visa Bulletin before you build a plan around adjustment of status.
That single rule explains why so many Indian families now pick rural projects. Twenty percent of EB-5 visas are reserved for rural investments and 10 percent for high unemployment areas. Another 2 percent goes to infrastructure. Reserved visas left unused in a fiscal year carry over inside the same reserved category the following year. Our page on the Indian EB-5 backlog and rural set-asides works through how the three pools behave when demand rises.
Dates to write on the wall
The Regional Center program is authorized through 30 September 2027. Grandfathering under 8 U.S.C. 1153(b)(5)(S), the subparagraph titled Protection from expired legislation, covers petitions filed on or before 30 September 2026, so a petition lodged on the thirtieth itself sits inside the protection. Minimum investment amounts rise with the first inflation adjustment on 1 January 2027.
One piece of sequencing saves months. An investor may file Form I-526E as soon as the Regional Center has filed Form I-956F for that particular offering, and USCIS must approve the I-956F before those petitions can be approved. Holding your filing back until the I-956F is approved gives away a priority date for nothing. Where timing is critical, our page on EB-5 expedite requests sets out what USCIS will and will not accelerate.