A Financial Guide for NRIs before Leaving India

"Pardesh Jaake Humme Bhul Na Jaana", before
your friends and family say this and you catch a flight to travel abroad, don't
forget to complete a few tasks in India which will help you save time and lots
of paperwork once you become an NRI (Non Resident Indian).Who is an NRI?
A Non Resident Indian
(NRI) as per India's Foreign Exchange Management Act 1999 (FEMA), is an Indian
citizen or Foreign National of Indian Origin, resident outside India for
purposes of employment, carrying on business or vocation in circumstances as
would indicate an intention to stay outside India for an indefinite period. An
individual will also be considered NRI if his stay in India is less than 182
days during the preceding financial year.
If you are planning to leave
India and become an NRI soon, here is a list of 10 things you must do, reports
Manish Chauhan for Jagoinvestor.com.1.Take
a Term InsuranceNever leave
India without being insured. After you become an NRI it would get very
difficult for you to buy a term plan from an Indian insurance company.
Hence it is better and advisable to first take a term plan and then leave
Hindustan. If not, later for applying for a term plan you would be called back
to India to complete some formalities and paperwork, which would again be more
expensive and time consuming. Also remember that even getting an online term plan
will not be that easy. So better complete this step before you become an NRI.
Even the premiums you will pay will be lower.2. Take Health
InsuranceToday when
cost of health care is sky rocketing, not having a health insurance will push
you towards the road of financial catastrophe in case of medical urgency. So
before you become an NRI, take a health insurance plan, otherwise you will have
to undergo the same problem prevalent as in case of term plan. As in you will
have to visit India for health checkups and it would also involve more
documentation and hassles in the process. Health Insurance is something you
must take, so why wait? Just take it today.3.Open
PPF AccountPutting money
in PPF (Public Provident Fund) is a good practice to save money. Since after
becoming an NRI one cannot open a fresh PPF account, so before you become an
NRI and leave India, open a PPF account. For opening a PPF account you can
either choose to visit a bank or the Post office. And then you can continue to
invest money in this PPF account regardless of being an NRI and living
outside India.
4.  Convert
your Savings bank account into NRO account
Many people
leave India without realizing the need to open an NRO account in the
country.  Instead of doing it later, it is more preferable to convert your
existing saving bank account into NRO (Non Resident Ordinary) account just
before leaving India. An NRI can deposit all of his/her Indian income into the
NRO account and also make payments like EMI payments, and other kind of
investments through the NRO account. To open a NRO account all that you require
is your 2 photographs, and a copy of your passport and visa.
5.  Connect
your Loan Account with your banking account for online payment
If you have a
home loan running and all you are worried about is its repayment after you
become an NRI and leave India, then here is the solution. The best you can do
is just connect your home Loan Account with your banking account for online
payment so that you can  pay the EMI's of your home loan using National
Electronic Fund Transfer (NEFT ) schemes.  It's a good idea to do this
before your leave India as it might happen that you would be required to visit
the bank to complete this process.
6.  Prepare
a Power of Attorney
When you have
already decided to move overseas for half a year or indefinite time, you can
never be completely sure that during this time gap when and why your presence
would be required in India. For instance if you want to buy any real estate
property or want to operate your bank account, or other related work, you might
want to prepare a power of attorney. Power of attorney is a legal way of
assigning power to someone to act on your behalf. Just choose some trusted
family person or a friend. You can also make a power of attorney which expires
at some stipulated time.
7.  Make
your mutual funds accounts online
In most cases,
people still want to transact in mutual funds after they become NRI, but they
face various issues at the time. One should be smart enough to open an online
account for mutual fund investing while he or she is dwelling in India. The
process is quite simple, for this you can open an online account with the
respective mutual fund AMC's (Asset Management Company) or the best option is
to open account with Funds India. They support both investments from
Indians and NRI investors.
8.  Open
an NRE account
NRIs who want
to invest their money in India and wish to get it back in the foreign country
(repatriation), would require to open an NRE (Non Resident External) account.
Since you are not allowed to deposit local money like interest from FD, rental
income etc into the NRO account, so for all these requirements, better open a
NRE account. Well, you would be delighted to know that the Fixed Deposits rates
on NRE accounts are quite attractive in Indian Banks.
9.  Sell
your shares and open a new NRI demat account
Warning! After
you become an NRI, you will not be permitted to sell off your existing demat
account shares which you had purchased before becoming a NRI. In order to
continue trading in share, you will have to open  operate a NRI demat
account. So before you become an NRI, the two best things you can do is to
either sell off the existing shares and take back the money or you can also
choose to open an NRI demat account and transfer your existing stocks to this
new account.
1UUpdate your KYCThe processes involved for executing various kinds of
financial products to residents and NRIs is different for each. For instance,
after you become an NRI you will not be able to do anything with banks, mutual
funds, life insurance policies (traditional or ULIPs), unless you update
your KYC  (know Your Customer) document.  Also don't forget while you
update your KYC, to get it signed by at least one witness, whose name and other
essential details should be provided in the form. So to be on a safer side it
would be better to first update your KYC, before you become an NRI.
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