The number of Indians going abroad is increasing steadily. Many Indians are going abroad for better opportunities and lifestyle changes. In recent times, most Indians have gone to countries like United Arab Emirates, Canada, USA, UK and France. When you move from one country to another, you have to face many types of challenges in the beginning. Before going abroad, you should plan well and take care of all aspects. So through this article people going to become NRIs are being informed about some financial tasks which they should complete before going abroad.
What to do with local bank accounts?
You should think about your bank accounts before going abroad because when you become an NRI, you cannot have local bank accounts. You will have to convert these accounts into Non-Resident Ordinary accounts. If you have more than one bank account, consolidate them, as converting multiple local bank accounts into NRO accounts will not be easy. With this, after becoming an NRI, you will only need a bank account to get any income like rent and dividend in India. You can go to the bank and convert your local account to NRO account by applying and filling the form as per the rules of the bank. Also, close any bank account that you do not use and keep a bank locker to keep documents and valuables safe.
What to do if you have invested?
Have you ever thought what would happen if you invested in equity mutual funds or shares before leaving the country? Nothing, you can convert your demat account to NRO or NRE account. In NRE account you can deposit money in any foreign currency like Dollar, Euro or Sterling Pound and withdraw this money in Indian Rupees. But you can send money to NRO account only till the limit set by RBI. You can send a maximum of one million dollars to your NRE account in a financial year. If you have made any investment abroad, you can send your income to India through NRE account.
If you have invested in stocks and equity in India, then you will get its income only through NRO account. You can consider opening a PIS (Portfolio Investment Scheme Account) to invest in equity even after becoming an NRI. PIS allows NRIs to buy and sell shares of any Indian company listed on exchanges like BSE and NSE. What to do if you have a mutual fund portfolio? You will have to submit your new KYC details to provide information about your new residential status. Convert your mutual fund folio to non-resident status and link your mutual fund folio to NRO bank account. Along with this, you can also seek the help of a professional to avoid this situation.
What to do about PPF and NSC accounts?
Once you change from a local resident to an NRI, you cannot open a new PPF account. With this, you cannot make fresh deposits in NSC. If you already have PPF and NSC accounts, you can maintain them till maturity. You will continue to get interest on them. Therefore, it is beneficial to keep PPF and NSC accounts active till the maturity period.
What to do about insurance schemes?
First of all, be aware of the insurance plans you have. Such as car insurance, bike insurance, term insurance, health insurance etc. When you start living abroad, there is no use of car insurance or two-wheeler insurance, because you will not take them abroad with you. If you have term insurance, it is beneficial for you to maintain it, as it will benefit your family. You should keep paying its premium on time.
In addition, if you have health insurance in India and the company abroad you are working in is also providing health insurance, then you can discontinue the health insurance policy of India. But when you come to India to meet your family, in this situation health insurance can give you benefits. Therefore, you can maintain it. Because pre-existing diseases have a waiting period of 2–4 years, it is beneficial to maintain an existing health insurance plan. With this, once the health insurance plan lapse, it cannot be renewed, so keep paying the health insurance premium on time.
