When filing the income tax return, your residential status is an important consideration in calculating your tax liability, especially if you have earned some income abroad during the financial year. Your residential status is determined by adding up the number of days that you were physically present in India during the last financial year.

A resident has to pay tax on their global income. The resident must disclose all the income earned from all sources and all countries in their income tax return and pay tax on it in India. (An NRI pays tax only on income earned or accrued in India)

The Foreign Earned Income Exclusion (FEIE, using IRS Form 2555) allows you to exclude a certain amount of your FOREIGN EARNED income from US tax. For tax year 2021 (filing in 2022) the exclusion amount is $108,700.