Today opportunities are knocking the doors of Indian residents which make them go abroad and earn in foreign currency. Are you also one of them who is planning to become an Non Resident Indian (NRI)? As this has become a common practice, one out of every two people are going abroad for employment. So it is important for all of us to know what all do we should take care before attaining the status of NRI.
First lets understand when we call an Indian resident as NRI :-
- When Indian citizens stays abroad either for employment or for carrying on any business or vacation or for any other purpose where duration of stay is not known.
- When Indian citizens go abroad on work assignments with foreign Government, Government agencies or international/multinational agencies.
- When Indian citizens who are officials of Central and State Government and public sector undertaking deputed abroad on assignments with foreign Governments/agencies/ organizations or posted to their own offices (including Indian Diplomatic Missions ) abroad.
Now Lets have a look at all the aspects which a resident Indian should take care before departing from India.
Convert Saving Account to NRO / NRE Account
People going abroad for the first time may not known these bank accounts. So lets first understand What Is NRO and NRE Account? What Is The Difference Between NRE and NRO account? Answer to these questions will help you to make your choice while converting your normal saving bank account into NRO/NRE account.
You can easily open any of these accounts in any Indian bank. All you need to open this account is your passport size photograph with photocopy of your valid passport and visa. But if have already moved to abroad and now want to convert your account the you will need to get your documents attested from the Indian embassy or notary before sending the same to the bank.
Open A Non Resident Ordinary (NRO) Demat Account
People going abroad should close their existing demat account (if any) and open a NRO demat account under the Portfolio Investment Scheme (PINS). Government of India have imposed limit on the amount of investment that an NRI can make in the shares and stocks in the Indian market i.e 5% of the paid up capital of any Indian company. You also need to transfer your existing share holdings also into this account.
You can check with your on the types of demat account they offer to NRI’s.
Power Of Attorney
People going abroad should give his power of attorney to a trustworthy person in India who can manage your financial transactions on your behalf like your bank accounts, real estate dealings, tax related activities etc.. You can either make your power of attorney general or specific i.e with some restrictions.
Update Your NRI Status
People going abroad should inform and update there status from Indian resident to Non Resident Indian (NRI) in different KYCs like mutual fund, bank, insurance companies etc..