ARTICLES

So, it is a wrap-up time in India, and you are looking to study and settle abroad or just en route to becoming an NRI. Well then, get started with the paperwork already as it is a lot of work which will need your full time and attention. Different countries have different requirements.

Let us go through the checklist when you are planning a life abroad:

Banking requirements: 

Consolidate all your bank accounts into one ordinary Non-Resident Ordinary account (NRO). You will need to submit copies of your bank account statements, passport, new working permit and visa details. Some banks might charge a conversion fee for this.  

Portfolio Investment Scheme is necessary if you choose to invest in the Indian stock market and bonds *. It is an RBI plan where an individual, an NRI, can buy or sell shares and debentures (mostly convertible), diverting the money via the NRI bank account.

Also, do not forget to give your fresh KYC details to your bank. For that, get your NRO account linked with utmost care and monitoring.

Factor in tax requirements: 

Sort your taxes before you move to another country. You must sign a Double Tax Avoidance Agreement (DTAA) to avoid being taxed in India and other countries. The story is different where mutual funds come in before you become an NRI. Weigh in those details too.

Mutual Funds: 

Applying for mutual funds can be restricted to NRIs from the U.S. or Canada. So, sort things out in advance. If you have existing mutual funds in India, you can keep paying your SIPs, but you have to fill out a KYC form with your new details and keep your asset management company informed.

Also, ensure you fill-up the FATCA (Foreign Account Tax Compliance Act) form for all your mutual fund investments. If you plan to repatriate the money outside India, then the investment should be made through your NRE account (in case the source of funds is from your foreign income). If the investment is made from your NRO account, you would have to get a CA’s clearance to repatriate the fund outside India.

Insurance details:

If you are planning to buy insurance (life, health among others), try and buy before you move abroad and keep paying the premiums online. Make sure you update your KYC. You might have to return in unforeseen situations, and you don’t want yourself without a safety net here.
 

What can or cannot you do?

PPFs and NSCs: 

Once an NRI, you cannot open new PPF accounts or invest in NSCs. But, if you have one already, let them be an interesting add-on. However, once the tenure is over, you cannot extend it.

Insurance plans:

If you have existing health plans and car insurance, they are the first to become null and void once you are an NRI, so take care of them first and surrender them, if required. 

Your new employer in the new country will most likely be taken care of your health insurance needs. However, it is prudent to continue your existing health insurance in India or opt for a new one in case you have plans to move back to India in future.

Term policies bought in India are still valid even after you gain the NRI status, as they may become beneficial for your nominees and dependents later. Just update your KYC details with the new address and other details.

Education loans: 

If you have taken an education loan, try and fulfil the EMI obligations once you land that job. Even as an NRI, you cannot miss the education loan EMIs you took prior to moving abroad and settling there. 
 

In a nutshell:

Planning your investments and paperwork well is key to a happy life as an NRI. So, get working with those advisers and planners already.