In India, under the provisions of the Indian Income Tax Act, 2025, income from certain foreign retirement pension accounts, like a US 401(k), is taxable only on maturity or withdrawal, as outlined by Rule 74, provided you have already filed Form 40 and opted for tax deferral.
For those who aren't familiar, Form 40 is beneficial for individuals with residential or ordinarily resident status in India who have foreign pension accounts like the U.S. 401k. By filing Form 40, you can postpone taxation in India until the year when the amount is taxed upon withdrawal or redemption in the foreign country. Form 40 typically needs to be filed electronically before the income-tax return (ITR) filing deadline.
