What to do When You Become an NRI

Source: The Economic Times:

Before we look at some tasks that one needs to do, let us first tackle the question - 'Who is an NRI'. NRI, in our context today, stands for Non Resident Indian.

The Foreign Exchange Management Act (FEMA), 1999, and the Income Tax Act, 1961, have different definitions of the non-resident status. While FEMA deals with the foreign exchange aspects, the IT Act deals with the taxation of your income. FEMA defines a resident on the basis of the 'purpose of stay abroad'. The IT Act defines a resident on the basis of one's 'actual period of stay' in India.

So if you've got the opportunity to work and live outside India for a few years, among all the planning and packing, don't forget to tie-up a few financial loose-ends. The Economics Times has an article listing five things that you must do before you get on that flight.

  1. Convert your bank savings account into an NRO account
  2. Close your existing Demat account, open an NRO Demat account and open a new Demat under PINS
  3. Give power of attorney to someone in India
  4. Open an NRE account if you may have substantial repatriation requirements
  5. Inform your other service providers like mutual fund house and insurance company

Click here to read the article.

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