How to optimize taxation of Americans living in India
In the coming years, my spouse and I (just the two of us) may move to India temporarily, for some number of years. We are retired US citizens, currently living in the United States, who came from India in our youth, some decades ago.
We are quite familiar with day-to-day retired life in modern India, from recent significant personal experience. Our current thinking is that most of our money/property will continue to remain in the United States and most of our (passive) income will continue to be sourced in the United States.
I am here to ask for some pointers/resources, on how to organize our finances to optimize our somewhat complicated tax liability, given that our worldwide income will be taxed by both India and the United States, while we are in India. We are quite familiar with how US income tax works, including the US-India DTAA and foreign tax credit for those Americans who live outside the U.S., but our understanding of Indian taxation is quite limited, hence this note.
If you have done something like this, how did you think about this topic? What did you read up and whom did you consult that you would recommend? What actions did you take, or that you later wished you had taken? The more specific the advice, the more valuable we will find it, I think.
[Added more detail below in response to comments here]
After having moved to India and spent 183 days in the fiscal year there, we will likely have failed the "729 days or fewer in the last 7 years" test, so we will not be able to obtain the RNOR status. By then we will be in our mid-sixties to mid-seventies. Yes on OCI. We understand we can maintain our NR status a couple of months if we arrive a couple of months before the end of the fiscal year.
For planning purposes, let's say we will remain in India for five years, though it really is quite uncertain, so we'd be interested in learning about relevant considerations for longer or shorter stays, given no RNOR status. Also, after returning to the US, our trips to India in subsequent years will likely be shorter - let's say fewer than 60 days in any 12 month period.
Tax advantaged accounts: IRA - both Traditional and Roth, HSA, 529.
Retirement Income: distributions from IRAs and HSA. Social Security income.
Other Income: interest, capital gains, dividends, from ordinary US bank and investment accounts.
Other than social security income and some stock dividends, we can control the amount and mix of other income, based on tax considerations. We do understand that India does not tax American Social Security payments, based on DTAA.
Please note that we are not expecting a detailed plan here. We'd be very happy to get some indication of considerations, and/or some concrete advice on what to read and whom to engage/consult for the details. Our main issue right now is that we don't know what we don't know.
Thank you.