Comprehensive Guide for New NRIs: Your Ultimate Checklist

Do you have plans to move abroad? If yes, do you know that a change in your residential status can affect your investments made as a resident Indian?

As an NRI, there is a checklist that you need to sort out before things get a bit hectic.

Upon doing so, your future self might thank you for being proactive and starting your Indian investment journey afresh as a ‘non-resident of India.’

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Checklist To Consider Before Leaving India

Before leaving India, you might want to consider the checklist below so that your journey abroad remains tension-free and fulfilling.

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Apply For An Aadhaar

With the recent changes in the KYC compliance issues, it is evident that the government might ask you to furnish Aadhaar details while investing in India. 

So, it is essential that you visit your nearest Aadhaar Kendra and apply for an Aadhaar before boarding your flight.

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Streamline Your Bank Account To Deliver Online Services

Nowadays, most of the banks are providing digital services and significantly reducing your in-person visits to the bank. 

By making sure your bank is offering such services, you will save a good amount of time as you don’t need to look for an authorized bank if need arises.

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Open A Public Provident Fund (PPF) Account

You cannot open a PPF account as an NRI. However, as a resident Indian, you can open a PPF account and continue holding your existing PPF investments.

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Appoint A Power Of Attorney (POA)

There are two main reasons behind appointing a POA agent, 

• You might grant a POA to an agent to continue with your legal disputes or 
• You might grant a POA to buy or sell a house property 

In both the cases, you will be asking the agent to sign and carry out transactions in India on your behalf.

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House Property Management

Gone are the days when you kept calling your friends and relatives to find people to manage your house property held in India. 

The new age startups are offering property management services ranging from finding a suitable tenant to maintaining your house property.

Established platforms like Magicbricks and Nestaway are offering these services, which you can consider getting in touch with.

Selling property in India as an NRI also requires some financial planning—learn more in our detailed "NRI’s Guide to Selling Property in India" blog

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Sovereign Gold Bonds

Sovereign gold bonds are an attractive investment opportunity for the resident Indians. 

As they offer fixed interest rates, they can act as collateral during the lock-in period. You will enjoy the capital appreciation at the time of bond maturity.

You can consider investing in these bonds before your residential status changes. If your status changes from resident to non-resident, you may continue to hold SGB until maturity but you cannot invest in new bonds.

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Checklist To Consider Once You Settle As An NRI

The following is the necessary checklist that you may have to complete once your residential status changes to NRI,

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Update Your KYC And FATCA

Once you qualify as an NRI from being a resident Indian, your next step is to head to the income tax portal and update your residential status.

By doing so, your inoperative PAN Card shall become operational and aid you to transact and repatriate funds abroad without facing hurdles.

Being aware of the Foreign Account Tax Compliance Act (FATCA) might be essential to ensure financial transparency.

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Conversion Of Resident Indian Savings A/c To An NRO Account 

Before leaving India it is better that you inform your bank representative that you want to convert your existing resident Indian savings account to NRO account.

Once you become an NRI, you must convert your existing account to an NRO account, and non-conversion might result in a hefty penalty of up to INR 2 lakhs.

Few banks might require you to furnish proof of change in your residential status before converting your resident Indian savings A/c to an NRO account.

The bank representative might ask for your passport, valid visa, proof of overseas residency and other relevant documents for the conversion.

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Open An NRE Account

You can open an NRE A/c if you plan to invest in India and repatriate funds abroad, plan to deposit funds in an Indian account or earn tax-free interest but repatriate whenever need arises.

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Open a PIS/PINS Account

A PIS/PINS account helps you hold and transact in Indian securities like stocks and listed bonds from your NRE bank account. 

To invest in these securities using your NRE bank account, get a PIS/PINS account. If not, a non-PIS account also works!

Investing in Indian mutual funds does not require a PIS/ Non PIS account. With iNRI, you can invest through the folio route. 

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Link Your Investments to Your NRO Bank Account(s)

So, as soon as you get your NRO bank account, get all your investments linked to it and so you can manage your investments as an NRI.

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Apply For An NRI Credit Card

Once your residential status changes, your existing credit card might cease to exist. And you must inform the bank representative and apply for an NRI credit card.

Nowadays, the banks in India are demanding that you open an FD account to receive a credit card, as they are unsecured loans and banks fail to keep a track of individuals moving abroad.

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Apply For Healthcare Insurance 

Only a few countries offer to cover medical bills if you are a tax-paying resident, and not all countries provide such facilities.

Hence, it is worth considering applying for medical insurance abroad if you do not have plans to relocate to India anytime soon.

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Check If Your Passport Is Due For Renewal

Check if your passport is nearing or past the expiry date and apply for a passport renewal.

You can also renew your passport in the country of your residence by visiting the Indian embassy or the passport administration outsourcing company for the government of India.

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Conclusion

The above checklist is not exhaustive, and depending on the situation, you might need to take care of other pressing issues. 

However, opening an NRO bank account, renewal of passport, updating your KYC, and applying for an Aadhaar are important and will remain helpful in your Indian investment journey.

You can join iNRI’s whatsapp community to connect with us for further queries.

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NRI Checklist: Frequently Asked Questions (FAQs)

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Is it mandatory to apply for an Aadhaar?

No, it is not mandatory to apply for an Aadhaar. 

However, investing in Indian mutual funds requires you to validate your KYC status, and Aadhaar can soon be crucial in validating your KYC status.

It can ease your workload, as you won’t need to verify your KYC status each time you invest in a new fund house.

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How to check NRI status in India?

To know your residential status in India, you will need to check your residential status in India by calculating your stay in India.

A financial year in India starts from 1st of April to 31st of March in the following year. 

To consider yourself as an NRI, 

• You need to be an Indian citizen residing abroad

• Your stay in India should have been less than 182 days in a financial year (or)
• Your stay in India for the current financial year should be less than 60 days and less than 365 days in the preceding four financial years.

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Is it mandatory to declare NRI status in India?

Yes, it is mandatory to declare your NRI status in India.

If you are an NRI indulging in any of the following activities, it is necessary that you declare your NRI status,

• Filing of ITR: If you receive regular income in the form of rent, royalty or such other income requiring filing of taxes.
• Opening Non-resident Bank Account:  When your residential status changes you can no longer continue holding resident bank accounts. Hence you need to declare your NRI status to open an NRI account.
• Investments: To invest in mutual fund investments in India, you need to validate your KYC by updating your residential status.
• DTAA: To avail of any DTAA benefits, it is essential that you declare yourself as an NRI.

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How can I convert my PAN card to NRI status?

Upon becoming an NRI, you will need to head to the income tax web-portal and update your residential status.

The PAN shall remain automatically updated once your residential status changes to NRI.

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