In this article we’ll cover 12 Things which NRIs should sort immediately
1) Bank Accounts
In case you didn’t know, as per FEMA laws it is ILLEGAL for NRIs to have an Indian Resident Account and doing so can attract hefty penalties. In case you’re wondering, if you’re found to be holding a resident savings account after becoming an NRI, you may have to pay a fine of up to three times the amount in your savings account. Additionally, you may have to pay a penalty of ₹5,000 per day from the first day of intervention until you change your savings account status.
So converting that Resident Account to NRE/ NRO account MUST be the 1st order of Business..
You simply need to get in touch with your Bank and Update your KYC Records. You also need to Update your VISA Status, Passport Status and Latest Address..
Also, please keep in mind that as an NRI it should be technically possible to operate your Accounts from Abroad, so open an Account with the Bank which has good IT systems. Generally I’ve seen that Private Sector Banks like ICICI, HDFC, etc have decent systems in place..
Infact very recently ICICI has introduced UPI for NRIs Using International Mobile Numbers. It means that you could start paying to anyone in India via UPI using your International Mobile Number.. So this could massively simplify the process of sending money to India for NRIs.
2) International Remittances
That means the process of sending money back and Forth from your Country. Now unless UPI becomes like a Global phenomena, the majority of the NRIs are stuck with remittances.
You need to Explore if your bank abroad has a remittance treaty with any Indian bank, that will save them fees on every remittance. This is especially important for people residing in the Middle East - because mostly all 5 figure upward transactions are monitored against terrorism funding. So if there’s a treaty, that also enables instant transfer rather than a wait for 2 days..
3) Demat Account
Just like a Resident Savings Account, you CAN’t hold a Resident Demat Account - It is in Direct Violation of FEMA Laws..
For Demat you can open an NRE account for all your Investments. But please remember you can't do intraday trading and currency trading from this NRE Account..
4) Credit Cards and Debit Cards
Since both of these have Annual Charges, it makes a lot of sense to close them - otherwise you’ll keep getting charged.. Also just like your Bank Account, you need to update your KYC, Address, VISA Status, Passport Status for both Debit and Credit Cards. Mostly for Debit Cards it’ll get automatically updated with your Bank Account, but for Credit Cards you’ll have to get it updated separately.
Also if you have any outstanding dues on your Credit Card please pay ASAP. I know of a case where someone had not paid their Credit Card dues in India for 1 year and they were stopped at Immigration in Dubai.
5) Govt IDs- PAN Card and Aadhar Card
It is absolutely mandatory for all the NRIs to have a PAN card with your latest information (KYC, Address, Nationality, etc). It is not mandatory for you to have an Aadhar Card, although it’s good to have one..
And if you have both PAN and Aadhar Card, it’s super important to have all your correct details - Name, Date of Birth, Father’s Name updated because these things could cause you a lot of problems in the Future, so please get them updated ASAP.
6) Health Insurance for Yourself and your Parents
The number 1 worry for most of the NRIs is Health issues for parents. I’m guessing it’s the same for you as well.
In addition we also recommend having good Health Insurance for yourself and your family in India. I understand you must have a Medical Cover in the country you’re staying but if you plan on coming back to India anytime in the future - it makes sense to have one right now, because no one will give you Insurance after a certain Age.
You can watch this video to find some decent Health Insurance Policies
7) Investments
If you were working in India and have just migrated abroad - you would’ve had a Provident Fund Account. My advice would be to close that Account in your next visit because if you do not withdraw money from PF account in 3 years - the account becomes dormant
If you have had Crypto Investment in India - Please sell them off and square off the Account because Crypto Investments are being treated as borderline Illegal. You don’t want to be in trouble because of this..
You can continue to hold your Mutual Funds and Stocks like you normally would.
8) Tax Compliances
This is 1 point where the majority of the NRIs have an issue. Here I would highly recommend you to talk to an experienced CA based in India.
If you have any kind of Income in India - either from FDs, or Mutual Funds, or Property Sale - then there are high chances there would’ve been some sort of TDS deducted. You need to take that into consideration in your Tax Filings. Additionally there are a lot of countries which have a A Double Taxation Avoidance Agreement (DTAA) with India. You can use that to save a Lot on Taxes but you will need to know how exactly filing has to be done to take advantage..
9) Indian Mobile Number
If you don’t have an Indian Mobile Number I would highly advise you to take one, and if you have a number but it’s inactive I would advise you to get it activated. There are a lot of Plans which enable you to receive SMS even outside India - please get that plan activated and you won’t face any trouble in operating your Bank Accounts from abroad.
10) Bank Loans
Look if you’ve taken any Loan in India and your payments are still ongoing, just make sure that you have sufficient Balance in your Bank Accounts. Loan Payments can normally happen from your NRE/ NRO Bank Account.
But if you’ve already paid off the Loan - please make sure that you take a No Dues Certificate from the Bank which will state that you’ve paid all your Dues and you don’t owe Bank anything else. This will ensure that the Banks do not levy any unnecessary charges on you and that your Credit Score is intact.
11) Property Related
If you have any kind of Property in India it is absolutely critical that you check your property records - just make sure that all your Property Taxes are paid on time and that you’re in compliance with the latest laws of Land. There have been a lot of changes and updates in the past few years like in the Indian Real Estate Ecosystem.
Also if you have any renters - there would be some TDS implications in the monthly rent they’re paying to you. Please make sure to check that and also make sure that your maintenance dues are being paid on time
12) Setting up POA - Power of Attorney
Many times you need to transact in India and physical presence is required to sign documents. These can be property or tax-related or banking matters. You can set up a Power of Attorney to any of your relatives who is resident in India. POA can be specific (Selling or Buying a Property) or it can be Generic (Specific tasks can be mentioned in POA agreement).
1) Bank Accounts
In case you didn’t know, as per FEMA laws it is ILLEGAL for NRIs to have an Indian Resident Account and doing so can attract hefty penalties. In case you’re wondering, if you’re found to be holding a resident savings account after becoming an NRI, you may have to pay a fine of up to three times the amount in your savings account. Additionally, you may have to pay a penalty of ₹5,000 per day from the first day of intervention until you change your savings account status.
So converting that Resident Account to NRE/ NRO account MUST be the 1st order of Business..
You simply need to get in touch with your Bank and Update your KYC Records. You also need to Update your VISA Status, Passport Status and Latest Address..
Also, please keep in mind that as an NRI it should be technically possible to operate your Accounts from Abroad, so open an Account with the Bank which has good IT systems. Generally I’ve seen that Private Sector Banks like ICICI, HDFC, etc have decent systems in place..
Infact very recently ICICI has introduced UPI for NRIs Using International Mobile Numbers. It means that you could start paying to anyone in India via UPI using your International Mobile Number.. So this could massively simplify the process of sending money to India for NRIs.
2) International Remittances
That means the process of sending money back and Forth from your Country. Now unless UPI becomes like a Global phenomena, the majority of the NRIs are stuck with remittances.
You need to Explore if your bank abroad has a remittance treaty with any Indian bank, that will save them fees on every remittance. This is especially important for people residing in the Middle East - because mostly all 5 figure upward transactions are monitored against terrorism funding. So if there’s a treaty, that also enables instant transfer rather than a wait for 2 days..
3) Demat Account
Just like a Resident Savings Account, you CAN’t hold a Resident Demat Account - It is in Direct Violation of FEMA Laws..
For Demat you can open an NRE account for all your Investments. But please remember you can't do intraday trading and currency trading from this NRE Account..
4) Credit Cards and Debit Cards
Since both of these have Annual Charges, it makes a lot of sense to close them - otherwise you’ll keep getting charged.. Also just like your Bank Account, you need to update your KYC, Address, VISA Status, Passport Status for both Debit and Credit Cards. Mostly for Debit Cards it’ll get automatically updated with your Bank Account, but for Credit Cards you’ll have to get it updated separately.
Also if you have any outstanding dues on your Credit Card please pay ASAP. I know of a case where someone had not paid their Credit Card dues in India for 1 year and they were stopped at Immigration in Dubai.
5) Govt IDs- PAN Card and Aadhar Card
It is absolutely mandatory for all the NRIs to have a PAN card with your latest information (KYC, Address, Nationality, etc). It is not mandatory for you to have an Aadhar Card, although it’s good to have one..
And if you have both PAN and Aadhar Card, it’s super important to have all your correct details - Name, Date of Birth, Father’s Name updated because these things could cause you a lot of problems in the Future, so please get them updated ASAP.
6) Health Insurance for Yourself and your Parents
The number 1 worry for most of the NRIs is Health issues for parents. I’m guessing it’s the same for you as well.
In addition we also recommend having good Health Insurance for yourself and your family in India. I understand you must have a Medical Cover in the country you’re staying but if you plan on coming back to India anytime in the future - it makes sense to have one right now, because no one will give you Insurance after a certain Age.
You can watch this video to find some decent Health Insurance Policies
7) Investments
If you were working in India and have just migrated abroad - you would’ve had a Provident Fund Account. My advice would be to close that Account in your next visit because if you do not withdraw money from PF account in 3 years - the account becomes dormant
If you have had Crypto Investment in India - Please sell them off and square off the Account because Crypto Investments are being treated as borderline Illegal. You don’t want to be in trouble because of this..
You can continue to hold your Mutual Funds and Stocks like you normally would.
8) Tax Compliances
This is 1 point where the majority of the NRIs have an issue. Here I would highly recommend you to talk to an experienced CA based in India.
If you have any kind of Income in India - either from FDs, or Mutual Funds, or Property Sale - then there are high chances there would’ve been some sort of TDS deducted. You need to take that into consideration in your Tax Filings. Additionally there are a lot of countries which have a A Double Taxation Avoidance Agreement (DTAA) with India. You can use that to save a Lot on Taxes but you will need to know how exactly filing has to be done to take advantage..
9) Indian Mobile Number
If you don’t have an Indian Mobile Number I would highly advise you to take one, and if you have a number but it’s inactive I would advise you to get it activated. There are a lot of Plans which enable you to receive SMS even outside India - please get that plan activated and you won’t face any trouble in operating your Bank Accounts from abroad.
10) Bank Loans
Look if you’ve taken any Loan in India and your payments are still ongoing, just make sure that you have sufficient Balance in your Bank Accounts. Loan Payments can normally happen from your NRE/ NRO Bank Account.
But if you’ve already paid off the Loan - please make sure that you take a No Dues Certificate from the Bank which will state that you’ve paid all your Dues and you don’t owe Bank anything else. This will ensure that the Banks do not levy any unnecessary charges on you and that your Credit Score is intact.
11) Property Related
If you have any kind of Property in India it is absolutely critical that you check your property records - just make sure that all your Property Taxes are paid on time and that you’re in compliance with the latest laws of Land. There have been a lot of changes and updates in the past few years like in the Indian Real Estate Ecosystem.
Also if you have any renters - there would be some TDS implications in the monthly rent they’re paying to you. Please make sure to check that and also make sure that your maintenance dues are being paid on time
12) Setting up POA - Power of Attorney
Many times you need to transact in India and physical presence is required to sign documents. These can be property or tax-related or banking matters. You can set up a Power of Attorney to any of your relatives who is resident in India. POA can be specific (Selling or Buying a Property) or it can be Generic (Specific tasks can be mentioned in POA agreement).
