Spending years living abroad is sure to make returning to India a whole new adventure for NRIs. On the one hand, the nostalgia of moving to your homeland is exciting; on the other hand, settling down in India can be a little difficult. So here’s a handy guide full of important steps that NRIs need to take to settle down in India after a long time abroad, doused with some fun facts and a touch of humor.
1. Rethink Your Savings: From NRI to Resident
NRO vs NRE Accounts: During the time spent abroad, NRIs usually continue having NRO (Non-Resident Ordinary) and NRE (Non-Resident External) accounts. However, when you finally settle in India, it is time to re-evaluate and even merge these accounts for a better approach towards your finances. An easy way to remember this transition is that “NRO means No Resident Obligations”- almost.
Conversion of NRI Bank Accounts: According to RBI regulations, you’ll need to convert your NRE and NRO accounts into resident savings accounts when your status changes from NRI to a resident Indian. It sounds complex, but most banks have a smooth process for this. Fun fact: By March 2023, NRIs held about $130 billion in deposits in Indian banks, which makes it quite a club to belong to!
2. Manage Your Investments: Update Residential Status
Investment Portfolio Adjustment: Your offshore investment strategy might have included offshore accounts, foreign stocks, or properties. It is now time to review these once you have entered India. Recontact your financial advisor- here Prime Wealth can help you for a smooth process of financial planning to return back to India and update your residential status in your mutual fund investments. Don’t forget to check the tax department’s guidelines on this, as rules may vary with foreign assets. (Of course, taxes want to tag along with you!)
Residential Status Update in Mutual Funds: NRIs are required to update their KYC details with financial institutions, especially mutual fund investments. Not to worry—it’s not rocket science! Just provide proof of your new address and residential status.
3. Tax Obligations: Return of the Resident Taxpayer
Filing Income Tax in India: You will have to pay taxes in India again if you return as an NRI. Yay! (Or not?) The Indian tax system is quite intimidating, but it’s not all bad news. If you have spent more than 182 days abroad in the previous financial year, you might still be considered an NRI for that year and get some tax exemptions.
Double Taxation Agreement (DTAA): Worried about getting taxed twice? Good news! India has DTAA agreements with several countries, which means you won’t pay double taxes on income earned abroad. In 2024, 96 countries had signed DTAAs with India, so chances are you’re covered.
4. Update Your Legal Documents: Keep the Paperwork in Check
PAN Card and Aadhaar Linkage: As an NRI returning to India, ensuring your PAN card is linked to your Aadhaar is crucial. From filing taxes to opening a new bank account, you’ll need these documents to be in sync. Without them, it’s like trying to make chai without tea leaves—not going to work!
Review Property and Will Documents: If you own property in India or abroad, update the legal paperwork, including your will. Ensure that your property ownership and succession plans are in accordance with Indian laws. You wouldn’t want any unwanted surprises later—no one likes a cliffhanger ending.
5. Healthcare: Stay Covered
Health Insurance for Returning NRIs: Health is wealth, and you’ll want to ensure you have the right coverage when you return. Many NRIs find that their international health insurance policies aren’t valid in India, so getting a local policy is a must. Did you know? In 2023, India ranked among the top 20 nations for affordable healthcare, with many NRIs opting for treatments in their home country.
Check Your Vaccinations: This sounds a bit weird, but depending on the place one has been living, some vaccinations may be required upon going back to India. Double-check this with your healthcare provider and stay up to date with routine vaccinations.
6. Reintegrating into the Indian Lifestyle
Finding the Right City: Coming back after years away can be disorienting, especially if you’ve been living in a small European town. India is a bustling and vibrant country, and each city offers something unique. Whether it’s the technology hubs of Bangalore or the cultural tapestry of Jaipur, choose a city that fits your needs and preferences.
Getting Used to the Noise Again: From constant honking to colorful street markets, India is known for its organized chaos. But we bet after a few days, it will feel like home again. After all, what is India without some delightful drama?
Conclusion: Get Used to Change
Settling back into India is a big change for NRIs, but with proper measures and planning, you will be able to do so in a relatively easy way. Reassess your finances, update legal documents, take care of health issues, and do not forget to absorb the unique lifestyle the country offers. In no time, you will rediscover the charm of being home.
FAQs
1. Do I need to close my NRI accounts after returning to India?
Ans – Yes, NRIs must convert their NRE and NRO accounts into resident savings accounts after returning permanently.
2. How do I update my KYC after returning to India?
Ans – You can update your KYC by submitting proof of your new residential address and status to your financial institution.
3. Will I be taxed on income earned abroad after returning to India?
Ans – Under the Double Taxation Avoidance Agreement (DTAA), you may not have to pay double taxes on foreign income.
4. What is the process of converting NRI investments after returning to India?
Ans – You’ll need to inform your financial advisor about your change in status and update your residential status with your investment portfolio.
5. Can I still hold foreign bank accounts after returning to India?
Ans – Yes, but you must declare them under Indian tax laws and might need to pay taxes on any income earned through them.
6. Is my international health insurance valid in India?
Ans – Most international health insurance policies are not valid in India, so it’s essential to get a local policy upon returning.
7. Do I need to link my PAN card with my Aadhaar after returning to India?
Ans – Yes, linking your PAN with your Aadhaar is necessary for filing taxes and other official processes.
8. How soon do I need to update my residential status in mutual funds?
Ans – It’s best to update your residential status with mutual funds and other financial investments as soon as you return to India.
9. What is DTAA, and how does it benefit NRIs?
Ans – The Double Taxation Avoidance Agreement (DTAA) prevents NRIs from being taxed twice on the same income in different countries.
10. What are the best cities for NRIs to settle in India?
Ans – Cities like Bangalore, Hyderabad, and Pune are popular among returning NRIs due to their growing infrastructure, job opportunities, and quality of life.
Disclaimer: The information provided here is for educational and informational purposes only and should not be construed as financial, legal, or tax advice. Consult with a qualified professional before making any investment decisions. We do not accept any liability for errors or omissions in this information nor any direct, indirect, or consequential losses arising from its use.
