NRI questions, answered properly.

This is one of the most common traps NRIs fall into when moving to the US. Four options, honestly.

First — what is a PFIC? Indian mutual funds are classified as Passive Foreign Investment Companies (PFICs) under US tax law. The IRS treats them punitively because they're foreign investment vehicles not subject to US tax reporting. Individual stocks and ETFs structured as equities may not be PFICs — but most Indian mutual funds are.

Option (a) — Sell everything now. Cleanest outcome but painful if you have large unrealised gains. You pay Indian capital gains tax (10% LTCG above ₹1L, 15% STCG) plus US tax with a Foreign Tax Credit offset. The FTC reduces double taxation but doesn't eliminate it entirely. If your gains are modest, this is often the right call — take the pain now, avoid the PFIC regime entirely.

Option (b) — Declare and pay under the excess distribution regime later. Sounds appealing but is usually the worst outcome. When you eventually sell, the IRS calculates tax at the highest marginal rate for every year you held the fund, plus interest. On a 5-year hold this can easily exceed what you'd pay selling today.

Option (c) — Mark-to-Market (MTM) election. You pay tax on unrealised gains each year at ordinary income rates. Not pleasant, but avoids the brutal excess distribution calculation. For someone uncertain about their timeline in the US, MTM gives you the most flexibility. You make this election on your US tax return for the year you became a US tax resident.

Option (d) — Transfer to parents. Does not solve the problem. The PFIC taint follows the asset, not the holder. Your parents would inherit the same issue if they're ever US tax residents, and gifting has its own complexities.

Your ETFs and individual stocks in Zerodha are a separate question — individual stocks are not PFICs. Some Indian ETFs may qualify depending on their structure. Your CPA needs to assess each holding individually.

You don't have to sell. Transfer your entire portfolio to a broker that accepts India-resident accounts via an ACATS transfer. No sale, no capital gains event — positions move exactly as they are.

Best option: Schwab International. Accepts Indian addresses, no freeze issues, familiar interface, $0 minimum. Open the Schwab account first, then initiate the ACATS transfer from inside Schwab — not from Robinhood's side. Schwab contacts Robinhood directly.

Alternative: Interactive Brokers (IBKR). More powerful platform, also accepts India-resident accounts. Better if you trade actively or want options. UI is more complex than Schwab.

Paasa is worth knowing — built specifically for NRIs returning to India, handles India tax documentation, has a Robinhood-like interface. No crypto though.

For crypto — it doesn't move via ACATS. Enable crypto withdrawals in Robinhood (Settings → Crypto → Enable Withdrawals, takes 2-5 days to unlock), then transfer to Coinbase or Kraken — both accept India-resident accounts. Note: India taxes crypto gains at a flat 30% with no cost basis deduction.

On US tax: moving to India doesn't remove your US tax obligation on US-source income. As a US citizen or Green Card holder you still file US taxes every year. Capital gains from US stocks are taxable in the US regardless of where you live.

Your bank is correct on the forms required. For NRO repatriation of FD maturity proceeds and inherited funds, here's exactly what you need:

Form A2 — mandatory for all outward remittances from India above $10,000. This is the RBI's basic outward remittance form. Your bank has given you this correctly.

OTT/LRS declaration — also correct. Confirms the transfer falls under the Liberalised Remittance Scheme ($250,000 annual limit for residents, $1M for NROs with CA certificate).

Purpose code S1301 — "Remittance for family maintenance and savings" is the correct purpose code for NRO repatriation of personal funds. Your bank has this right.

Form 145/146 — these are not required for NRO account repatriation of FD maturity proceeds or inherited PPF/FD funds. These forms relate to specific categories of repatriation that don't apply to your situation. Your bank is correct to say you don't need them.

The FX rate matters here. On a repatriation of ₹1.96 crore (~$235,000), the difference between your bank's wire rate and an optimised transfer service can be ₹3-6 lakh. Compare rates before wiring.

Two routes — and the choice depends on your parents' age and whether they have pre-existing conditions.

Route 1: US-issued visitor insurance (the default for most NRIs). VisitorsCoverage, IMG Patriot America, IMG GlobeHopper Senior, Atlas America (WorldTrips), Seven Corners RoundTrip, Trawick Safe Travels — all US-licensed, accept B1/B2 visitors, pay US hospitals directly. $50-120/month for healthy parents in their 60s. For parents 70+, IMG GlobeHopper Senior or Seven Corners (no age cap) are the right options. Buy before they board their flight — premiums are the same whether 1 day or 60 days before.

Route 2: Indian travel insurance from Niva Bupa, Star Health, or Bajaj Allianz. Cheaper but limited overseas coverage and reimbursement-based (you pay the US hospital upfront, file a claim later). For a healthy parent 60s on a 1-month visit, this can work. For older parents or any pre-existing conditions, route 1 is dramatically better.

US healthcare costs for an uninsured visitor are brutal — a 3-day ER visit can run $15,000-50,000. A coronary stent procedure: $80,000-150,000. Don't economise on coverage limit; $100,000 minimum.