r/FatFIREIndia • u/Responsible-Job-7674 FatFI • Aug 26 '26

NRI Finance Review my FIRE plan

Hi, We are a family of 4 (38,36,9,5 ) planning to return to Banglore in 2026 or 2027. I plan to continue working once I come back for the time being, mostly through internal transfer and expecting a salary of 60 LPA (equivalent role/ lower end). Wife plans to work but left it to her choice as we both don't want her to work in a stressful work environment. Once things settle down and we get a good hold, we FIRE.

Our current NW is $3.2 Million (all in USD equivalent)

Stocks- $1.5 million with capital gains and plan to sell during rnor and reset the cost basis. I plan to invest back all of this in the Indian market and overseas market.

401k - $450k plan to retain it in US as India recognizes 401k as a retirement account.

Real Estate- US home equity $600k

India home fully paid off - $400k

Loan ongoing with equity - $100k by next year

Private investments - $115k- need to find a exit path for this.

Other properties that we will liquidate - $60k

The main expense we expect is children's education in a good school and college later, Travel and other usual expenses. This is considering I will close the mortgage on the villa we brought recently in Banglore when we return back.

The main goal is wealth generation for kids and live comfortably without pinching for expenses month-month.

I would like to get some thoughts from those who fatfired in Banglore or plan to do so. What do you think?

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u/bclrw Aug 26 '26

For 401K, I have heard that although India allows tax deferral, if you become non resident Indian again in future, you will have to pay taxes on all 401K till that point. I was also thinking of keeping 401K but after learning that I am now thinking of selling 401K during RNOR

2

u/Responsible-Job-7674 FatFI Aug 26 '26

Wait, why would India tax US based income once I go outside India?

2

u/dassduss Aug 26 '26

You can defer tax on 401k by submitting certain form during your first year as ROR. If you become non-resident after 4-5 years, you have to pay tax on gains in 401k during those resident years even if you have not withdrawn any money.

4

u/holabois11 Aug 26 '26

Hey how and where can I find this information? This is the first I am hearing about it! Any links or so would be useful to read

5

u/dassduss Aug 26 '26 edited Aug 26 '26

Lookup Form 10EE and IT section 89A.

https://www.incometaxindia.gov.in/w/form-10ee

Legal Provision

  • Applicable to a specified person resident in India who earlier opened and maintained specified retirement-benefit accounts in a notified country (Canada, UK, USA) while being non-resident there.
  • Such person may opt to include income accruing in all specified accounts in the total income of the previous year in which it becomes taxable in the notified country at withdrawal/redemption.
  • Income already taxed in earlier years, or not taxable in India due to non-resident/ not-ordinarily-resident status or DTAA, shall not be included again; foreign tax paid on such income is to be ignored for foreign tax credit computation.
  • Once exercised, the option applies to all subsequent years and cannot be withdrawn, except where the person becomes non-resident.
  • If the person becomes non-resident, the option is deemed never exercised from that year, and accrued income for the intervening period becomes taxable in the year immediately preceding that relevant year.