Regaining Indian Citizenship

[bengal_tiger]

A lot has been discussed on this forum on the merits and demerits of gaining US citizenship before one returns to India. It seems that if one returns with a net worth more than $300K and has the desire to invest in a variety of financial products (such as mutual funds) and be self employed (say, start a business), it may not be a good idea holding on to the US citizenship as:

1) US taxes its citizens on global income
2) Self employed USCs living abroad have to pay social security taxes
3) USC investing abroad may face PFIC related issues

Has anyone on this forum (or someone you know) regained Indian citizenship after returning to India as a US Citizen. If so, can you please share your experience. For example:

1) What prompted you to regain Indian citizenship?
2) Is the process slow? USC typically takes 6 months or sooner.
3) Is there anything about the USC you will be missing even if you gave it up voluntarily?
4) Is there anything in the Indian law which makes a naturalized citizen less important than a native-born citizen?

[Rajram]

A lot has been discussed on this forum on the merits and demerits of gaining US citizenship before one returns to India. It seems that if one returns with a net worth more than $300K and has the desire to invest in a variety of financial products (such as mutual funds) and be self employed (say, start a business), it may not be a good idea holding on to the US citizenship as:

1) US taxes its citizens on global income
2) Self employed USCs living abroad have to pay social security taxes
3) USC investing abroad may face PFIC related issues

Has anyone on this forum (or someone you know) regained Indian citizenship after returning to India as a US Citizen. If so, can you please share your experience. For example:

1) What prompted you to regain Indian citizenship?
2) Is the process slow? USC typically takes 6 months or sooner.
3) Is there anything about the USC you will be missing even if you gave it up voluntarily?
4) Is there anything in the Indian law which makes a naturalized citizen less important than a native-born citizen?[/quote]

1) I doubt if anyone has done that. OCI is a relatively new scheme and I am not sure if PIOs were eligible to apply for Indian citizenship.
I might eventually get Indian citizenship back if things work out in India. But India needs to really work hard to get my citizenship back :D
2) Of course, India will have no problems adding one more person to it's population.
3) Yes. You will have to go back with a traveller's visa if you ought to visit your kids in US. That will suck like hell :eek:
4) In India $$$ matters more than whether you are a citizen or not.

[moneyIsNot_funny]

Too much attention is being paid to paying self employment taxes. I have a small (ok, mini minor) business, and I look at it as just the cost of doing business. At the end of the day, all I care about is if I have netted more than what I have netted as an employee, and if I am able to park more into my retirement accounts here (which of course, will attract more taxes if you are living in India, for all the income it generates - but thats another story).

In any case, I have heard that US will oblige you to continue paying taxes for a long time even after renouncing US Citizenship since they want to discourage citizens from giving up citizenship for tax reasons.

[MrLong]

In any case, I have heard that US will oblige you to continue paying taxes for a long time even after renouncing US Citizenship since they want to discourage citizens from giving up citizenship for tax reasons.[/quote]


I recall from a conversation with a friend, that US will tax you for 10 Yrs after renouncing the USC. However, I think there is a financial limit on the money you will move out of US. I vaguely remember that if the limit is greater than 2 Million USD, this 10 yr taxation will kick in.