NRI tax insights

The PERM Freeze Is an Immigration Story. For Indian H-1B Families, It's Also a Money Story.

By NRITAX.AI, Editorial Team · Published 2026-10-24

The PERM Freeze Is an Immigration Story. For Indian H-1B Families, It's Also a Money Story.

If you are an Indian professional on an H-1B, you may have found yourself doing some difficult arithmetic lately: how many years you have already spent in the United States, how long your Green Card process might take, and whether it is time to think seriously about returning to India.

Before that uncertainty turns into a decision, it helps to separate what has changed from what has not—and to consider the financial questions that often receive attention only after a move is underway.

An immigration development does not automatically mean you need to return to India. But if returning becomes a possibility, understanding your financial position in both countries can help you make a more informed decision.

What Actually Happened?

On October 8, 2026, US Labor Secretary Keith Sonderling announced restrictions on the acceptance and processing of PERM applications involving eight employers: Microsoft, Adobe, Cognizant, Infosys, TCS, Wipro, HCLTech and Capgemini. The announcement referred to federal investigations into alleged misuse of the H-1B and PERM programmes.

On October 9, India's Ministry of External Affairs clarified that the suspension did not, by itself, affect the validity of existing H-1B visas or the status of their holders and dependents. It also acknowledged that the restrictions could affect Green Card processing for eligible employees at the companies concerned.

The distinction matters.

An H-1B visa allows eligible foreign professionals to work in the United States under the applicable immigration rules.

PERM labour certification is a step generally required for many employer-sponsored employment-based Green Card cases. It involves a labour-market certification process administered by the US Department of Labor.

The restrictions concern the PERM process involving the named employers. They should not be interpreted as an automatic cancellation of existing H-1B visas or as proof that every employee at those companies is affected in the same way.

The practical impact depends on the employer, the stage of the immigration case and the rules applicable to the individual.

If you are affected, your employer's immigration team and a qualified US immigration attorney are the appropriate sources for case-specific guidance.

Why This Is Also a Financial Planning Question

When immigration news breaks, the first concerns are usually employment, visa validity and the Green Card timeline. Those are important. But after several years in the United States, most households have accumulated more than immigration paperwork.

Consider an Indian software engineer who has lived in the US for six or seven years.

They may have:

• A US salary and accumulated savings.
• US stocks, exchange-traded funds or other investments.
• A 401(k), IRA or another retirement account.
• Property or rental income in India.
• Indian bank accounts, loans or other financial commitments.
• A spouse or children whose lives would change if the family relocated.

None of these circumstances automatically makes returning to India the right choice.

However, if returning becomes a serious option, the decision involves more than finding a job or booking a flight. It can affect income, investments, banking arrangements, tax obligations and long-term financial plans in two countries.

Preparing in advance is generally easier than trying to organise everything under time pressure.

If You Return to India, What Happens to Your Income?

One of the first questions to examine is how your Indian tax residency may change.

India's tax rules distinguish between Non-Resident (NR), Resident but Not Ordinarily Resident (RNOR), and Resident and Ordinarily Resident (ROR) status. The applicable status can affect how income earned in India and abroad is treated.

Your passport or the location of your employer alone does not determine your Indian tax treatment.

Relevant factors can include:

• The number of days you spend in India during the relevant tax year.
• Your residence and travel history in earlier years.
• The applicable residential-status tests and any relevant exceptions.
• Where your income arises and, for employment income, where the work is performed.
• Whether a tax treaty or foreign tax relief provision applies.

A returning NRI may qualify for RNOR status, depending on the relevant conditions. That status can affect the treatment of certain foreign income, but it should not be treated as a blanket exemption for all overseas earnings.

What if You Continue Working for a US Employer from India?

Suppose you return to India but continue working remotely for a US company. You should not assume that your salary remains outside the Indian tax system simply because the employer is based in the United States.

Salary relating to employment exercised in India is generally treated as income earned in India, subject to the applicable law and relevant circumstances.

You may also need to consider US tax obligations, treaty provisions, foreign tax relief and whether your employment arrangement creates additional compliance obligations for your employer.

The practical lesson: Review the tax consequences before finalising your relocation date, not after you arrive.

What Should You Do About Your US Investments?

A return to India does not necessarily mean you should sell every overseas asset. Each asset should be assessed according to its tax treatment, liquidity needs, costs and long-term purpose.

US Stocks and ETFs

Selling investments before leaving the United States may trigger capital gains tax. Holding them after becoming an Indian tax resident can raise questions about Indian taxation and foreign-asset reporting.

The applicable treatment depends on your residential status, the type of investment, the timing of transactions and the relevant tax rules.

Before selling or transferring investments, review:

• Your original purchase dates and acquisition costs.
• Unrealised gains and losses.
• The tax consequences of selling before or after relocation.
• Foreign dividends and other investment income.
• Applicable foreign-asset reporting requirements.

Do not assume that every returning NRI has identical disclosure obligations. Your status and the applicable rules must be checked.

401(k) and IRA Accounts

If you have a US retirement account, understand the consequences before withdrawing money or changing the account arrangement.

Withdrawals before age 59½ may trigger US income tax and an additional 10% tax on the taxable amount, unless an exception applies.

Depending on your circumstances, a withdrawal may also raise Indian tax questions. The timing, account type, applicable treaty provisions and your residential status can all matter.

Cashing out is not automatically the best option. In some situations, retaining the account and planning future withdrawals may be worth considering.

Seek qualified advice before making an irreversible decision.

What About Property and Bank Accounts in India?

Property and Rental Income

If you own a flat or house in India, review the tax treatment of rental income and any planned sale.

For an NRI selling Indian property, tax deducted at source (TDS), capital gains calculations and the possibility of applying for a lower or nil deduction certificate can be important considerations.

The amount deducted at the time of a transaction and your final tax liability are not necessarily the same.

Before signing a sale agreement, understand the applicable withholding requirements, documentation and any available relief.

NRE and NRO Bank Accounts

NRE and NRO accounts have different purposes and regulatory treatment.

If your residential status changes when you return to India, you should review your account arrangements with your bank and determine whether redesignation or other changes are required under the applicable FEMA rules.

It is worth asking your bank about the process before the move, rather than assuming your accounts will automatically be updated.

Before Making a Decision, Organise Your Financial Records

If returning to India is even a possibility, you can begin preparing without committing to a move.

A useful starting checklist includes:

• Your recent US and Indian tax returns.
• Salary statements and employment records.
• Brokerage statements, acquisition costs and transaction histories.
• 401(k), IRA and other retirement-account statements.
• Indian property documents and rental records.
• Records of foreign taxes paid.
• Indian bank-account details and outstanding financial commitments.

These records can help a qualified tax professional assess your position and identify questions that need attention.

Three Questions to Keep Separate

Immigration, financial planning and tax compliance are connected, but they are not the same problem.

1. Immigration: What are your actual options?

Understand your visa status, employment situation and Green Card process. Consult a qualified US immigration attorney for advice specific to your case.

2. Financial planning: What would a move change?

Review your income, savings, investments, retirement accounts, loans and family commitments. Consider the financial consequences of staying in the US as well as returning to India.

3. Tax and compliance: What changes across the two countries?

Assess residential status, foreign income, investment taxation, reporting requirements, bank accounts and any applicable foreign tax relief.

An immigration setback is not, by itself, a tax event. However, a change in residence or employment arrangements can have tax consequences that deserve advance attention.

How NRITAX.AI Can Help You Prepare

If you are considering a return to India, you do not have to start by figuring out every tax rule on your own.

NRITAX.AI helps NRIs explore cross-border tax questions and understand the issues they may need to review when managing finances across countries.

Chat with Yukti AI

Have a question about your situation?

Yukti, our AI tax assistant, can help you explore topics such as:

• Indian tax residency and RNOR status.
• US investments and foreign income.
• Cross-border tax considerations when returning to India.
• Property income, capital gains and relevant compliance questions.
• Documents and questions to prepare before speaking with a tax professional.

Start with your question, understand the relevant concepts and identify what you may need to investigate further.

Chat with Yukti AI

Book a Tax Advisory Session with Our Experts

Some decisions need more than general information.

If you need help understanding how a potential move could affect your particular circumstances, consider booking an advisory session with a qualified tax expert.

An advisory discussion can help you identify the relevant facts, understand the tax issues that need attention and determine which next steps may be appropriate for your situation.

You may want to discuss:

• Your expected date of return and Indian residential status.
• Your US salary, investments and retirement accounts.
• Your Indian property, rental income and bank accounts.
• Potential foreign tax relief and cross-border reporting obligations.
• The documents you should organise before relocating.

Explore NRITAX.AI and enquire about an advisory session

*Advisory sessions are subject to availability and applicable service terms. Please confirm the scope of professional advice when booking.*

A Final Thought

A disruption to the Green Card process can make years of planning feel uncertain overnight. The sensible response is neither panic nor an automatic decision to return home.

It is to understand what has changed in your own case, evaluate your financial position in both countries and keep your options open.

For Indian professionals who have built financial lives across borders, preparation can make a potential transition easier to understand and manage.

At NRITAX.AI, we believe that cross-border tax questions should be easier to navigate. Whether you are exploring a question with Yukti AI or seeking a personalised discussion with a tax expert, the goal is to help you understand the issues that matter before making important financial decisions.

Your career may cross borders. Your financial planning should, too.

Explore NRITAX.AI to start preparing for your cross-border tax questions.

Sources and Further Reading

• MEA says US suspension of PERM applications does not affect validity of existing H-1B visas — All India Radio, October 9, 2026.
• What Indian workers need to know as US halts Green Card applications at major IT firms — ThePrint.
• PERM Green Card freeze at Microsoft, Infosys, TCS and five others — NRI Information.
• US suspends Microsoft, Infosys, TCS, Wipro and five other IT giants from Green Card programme — Swarajya.

*Disclaimer: This article is for general educational purposes only and does not constitute legal, immigration, financial or tax advice. Immigration policy and tax rules can change. Verify the current position with official sources and consult qualified professionals before making decisions.*