If get the chance to work, study, and reside outside of India for a long time, besides all the planning, do not forget your finances. This topic is frequently discussed on numerous online platforms. So, before you move abroad and become a non-resident Indian, here are some aspects to take care of:
Change your resident account to an NRO Account
You should convert your resident account into a Non-Resident Ordinary Account or NRO Account because the RBI has made it compulsory under their regulations. Like a typical resident account, an NRO Account has some limitations. Here, you can deposit rupee gains from India like rent, interest, dividends, etc. Also, you can deposit money that is coming from overseas as freely convertible foreign currency.
This account allows you to write cheques for local payments, monthly instalments, or investments.
The interest rates on NRI Account are comparable to the interest earned on a standard account. You should contact your local bank and complete the necessary forms to convert the account and understand the interest rates and taxation policies.
Open a new NRO Account
There are some limitations when it comes to NRI investments in India. An NRI, for example, cannot contribute more than 5% of the paid-up capital of an Indian company. The RBI mandates that you make these adjustments to your Demat Accounts to track these restrictions. You cannot manage or use your ordinary Demat Account as an NRI. The shares would need to be transferred to an NRO Account. You can either keep or sell these shares.
Give power of attorney to someone residing in India
Having someone you can trust in terms of managing your Bank Accounts and other financial transactions is easier from an operational standpoint. Almost all financial problems, including managing accounts, purchasing, and selling property, renting out a place, signing tax documentation, issuing cheques from your account, etc., can be managed through a power of attorney.
Open an NRE Account for repatriation
For people who might need to repatriate i.e., transfer their funds, an NRE Account may offer several advantages and privileges. Although opening an NRE Account from outside is technically possible, operating is challenging. So, you should probably open it before leaving. You can open NRE Account as a Current, Savings, or Term Deposit.
Your money can be transferred into NRE Accounts from overseas. You can also invest this cash to return the selling proceeds to your home country.
Notify your bank
The Know Your Customer norms require you to inform your bank that you are moving abroad. Each service provider like Insurance provider or a Mutual Fund firm should be notified about the same.