Moving abroad and becoming a Non-Resident Indian (NRI) is an exciting milestone, but it comes with a unique set of responsibilities. From managing your finances to handling your Indian investments and ensuring everything is in order with your legal and tax status, it’s crucial to be well-prepared. This essential checklist for new NRIs will help you understand the key actions you need to take before and after moving abroad, ensuring that your financial and legal matters are in top shape as an NRI.
Before Leaving India: Essential Steps to Take
- Apply for Aadhaar Card: With recent changes in KYC compliance, the government may require you to provide Aadhaar details when investing in India. Therefore, it’s crucial to visit your nearest Aadhaar Kendra and apply for an Aadhaar card before your departure.
Key Tip: Ensure that your Aadhaar is linked to your mobile number, which will be essential for receiving OTPs for online transactions. - Streamline Your Bank Accounts for Online Services Ensure that your bank account offers NRI banking services and is linked to mobile banking for easy access from abroad. This will allow you to manage transactions, check balances, and perform necessary financial operations without having to visit the bank.
- Open a Public Provident Fund (PPF) Account NRIs are no longer allowed to open new PPF accounts. However, if you already have a PPF account as a resident, you can continue holding it. You can still make contributions, but the proceeds must be transferred to an NRO account upon maturity.
- Appoint a Power of Attorney (POA) A POA will allow someone you trust to manage your affairs on your behalf while you’re abroad. This includes handling legal matters, managing or POA for selling property in India, and representing you in court. It’s essential to have someone reliable to avoid any inconvenience.
- Property Management in India Property management is key to maintaining your real estate investments in India. You can hire property management companies or explore online platforms like Magicbricks or Nestaway to handle renting, maintenance, and tenant management on your behalf. Many companies now offer NRI property services, making it easier for you to manage your property remotely and ensuring peace of mind as you live abroad.
After Settling as an NRI: Key Tasks to Complete
- Update Your KYC and FATCA Details After becoming an NRI, the first step is to update your KYC details with your Indian financial institutions. This includes informing the bank of your change in residential status. You will also need to comply with FATCA (Foreign Account Tax Compliance Act) requirements to ensure full transparency in your financial dealings.
- Set Up UPI for Easy Transactions
UPI (Unified Payments Interface) is one of the most popular digital payment methods in India. Setting up UPI as an NRI allows you to make easy and fast payments within India. Whether for utility bills, investments, or sending money back home, UPI offers a seamless and convenient method for NRIs to handle financial transactions. To know more about UPI for NRIs, check out our detailed blog on UPI for NRIs: Benefits - Convert Your Resident Indian Savings Account to an NRO Account Upon changing your status to NRI, you must convert your resident Indian savings account into an NRO (Non-Resident Ordinary) account. Failure to do so could result in penalties. Banks typically require proof of your change in residential status, such as a valid visa or overseas residency certificate.
- Open an NRE Account An NRE (Non-Resident External) account is essential for NRIs who want to earn tax-free interest on their savings and repatriate funds back to their country of residence. This account will allow you to deposit foreign earnings while keeping your funds in India.
- Open a Portfolio Investment Scheme (PIS) Account If you plan to invest in Indian securities like stocks and bonds, you’ll need a PIS account linked to your NRE account. This account will help you hold and trade in Indian securities while ensuring compliance with Indian financial regulations.
- Start Mutual Fund Investments As an NRI, you can invest in Indian mutual funds, but you’ll need to complete your KYC process first. If you’re planning to invest, link your mutual fund investments to your NRO account for seamless transactions.
- Link Your Investments to Your NRO Bank Account Once you open your NRO account, it’s important to link your mutual funds, stocks, and any other investments to this account. This will allow you to easily manage and monitor your portfolio.
- Apply for an NRI Credit Card If you had a regular credit card in India, it may not function once your status changes. You’ll need to apply for an NRI credit card. To do so, many banks require you to open a Fixed Deposit account as collateral, as NRI credit cards are considered unsecured loans.
- Consider Health Insurance Abroad Many countries do not offer healthcare services to foreign nationals, so it’s a good idea to invest in international health insurance. Look for insurance plans that cover medical expenses and offer coverage in your country of residence.
- Check Passport Validity Ensure that your passport is valid for at least six months after your departure from India. If it’s close to expiry, apply for a renewal at the nearest Indian embassy or consulate.
Conclusion
Becoming an NRI brings a host of financial opportunities and responsibilities. To make sure your transition is smooth and hassle-free, it’s important to stay proactive and follow these key steps. By handling your banking, investments, and legal matters correctly, you will ensure that your finances are managed well while adhering to the legal and regulatory framework. Following this essential checklist for new NRIs will ensure that you take the necessary steps to manage your finances and legal affairs efficiently as an NRI.
Brivan Consultants specializes in assisting NRIs with managing their investments and legal responsibilities. Whether it’s updating your KYC, managing your investments in India, or ensuring that your finances are compliant, we can guide you through every step of the process.
For personalized guidance, feel free to contact Brivan Consultants today!
Frequently Asked Questions (FAQs)
Q1. Is it mandatory to apply for an Aadhaar?
No, applying for an Aadhaar is not mandatory. However, investing in Indian mutual funds requires validating your KYC status, and Aadhaar can streamline this process, easing future investments.
Q2. How to check NRI status in India?
To check your NRI status, you need to calculate your stay in India. If you stayed in India for less than 182 days in a financial year, or if your stay was less than 60 days in the current year and 365 days in the preceding four years, you qualify as an NRI.
Q3. Is it mandatory to declare NRI status in India?
Yes, it is mandatory to declare your NRI status if you’re involved in any activities like filing ITR, opening NRI bank accounts, making investments, or availing of DTAA benefits. Updating your residential status is crucial for proper legal and financial management.
Q4. How can I convert my PAN card to NRI status?
To convert your PAN card to NRI status, visit the income tax web portal and update your residential status. The PAN will be automatically updated once your status changes to NRI.
