5 Tasks NRI Must do When They Visit India

Introduction

When Non-Residential Indians (NRIs) plan their return to their home country, there are several crucial tasks they should consider undertaking to ensure a smooth transition and avoid potential complications down the road. This article discusses five essential tasks NRIs should prioritize during their visit to India. Addressing these tasks can help streamline their financial and legal affairs, ensuring a hassle-free stay in India.

1. Power of Attorney

One of the first steps for an NRI returning to India is executing a Power of Attorney (POA). A POA grants someone you trust the legal authority to act on your behalf, such as managing property, collecting rent, or operating a bank account. There are two main types of POAs: general and specific. A general POA grants broad authority, while a specific POA delegates particular powers. Choose the right type and appoint a trusted individual, like a family member. Drafting a customized POA tailored to your needs ensures it serves your unique requirements.

Ensure the POA is legally valid in India and accepted by relevant authorities. Consulting with a legal professional to draft and notarize the POA can save time and prevent legal issues. A properly executed POA provides peace of mind, knowing your affairs are in capable hands even when you are not present.

2. PAN and Aadhaar Linking

During your visit, ensure your Permanent Account Number (PAN) and Aadhaar card are correctly linked and reflect your NRI status. Neglecting this can lead to your PAN becoming inactive, complicating financial transactions in India. Update your PAN data and residential status on the income tax portal, or seek professional assistance to streamline the process. Failing to link your PAN and Aadhaar can result in difficulties with income tax returns and banking transactions. Prioritize this task to maintain smooth financial operations.

3. Opening an NRO Account

Compliance with the Foreign Exchange Management Act (FEMA) is essential for NRIs. Ensure you open a Non-Resident Ordinary (NRO) account to manage income earned in India and repatriate funds abroad. Convert your regular savings account into an NRO account to avoid violating FEMA regulations. Visit your bank, complete the necessary paperwork, and understand their specific policies. An NRO account helps manage income from sources like rent, dividends, or pensions and simplifies tax compliance, as the income is subject to Indian taxation. Properly maintaining this account ensures compliance with Indian financial regulations and avoids potential legal issues.

4. Creating a Will

Discussing and creating a will is essential, especially if your parents are ageing. A well-drafted will can prevent disputes and legal complications, ensuring your assets are distributed according to your wishes. Have open conversations with family members to outline your intentions clearly. Consult legal professionals to create and register the will, ensuring its legality and validity. This step provides your family with clear directives, reducing stress and potential conflicts during difficult times. A properly drafted will reflects your foresight and care for your loved ones’ future.

5. Handling Fixed Deposits (FDs)

Many NRIs have fixed deposits (FDs) in India, often subject to Tax Deducted at Source (TDS). Filing your income tax returns correctly can help reclaim these deducted amounts, potentially saving you money. Consider directing refunded amounts towards charitable causes or investments in exchange-traded funds (ETFs) for tax-efficient, long-term growth. Ensure your tax returns are filed accurately and on time to reclaim TDS. A tax consultant can help navigate the complexities of the Indian tax system and maximize refunds. Properly managing your FDs and tax filings is essential for a robust financial strategy during your visit to India.

Bonus Point: Investing in ETFs for Long-term Growth

As a bonus recommendation, consider investing in Exchange-Traded Funds (ETFs) during your visit to India. ETFs offer a cost-effective and tax-efficient way to participate in the country’s growing economy. Research and choose ETFs that align with your financial goals and risk tolerance.

Consult financial advisors to understand the best options available and how they fit into your overall investment strategy. Investing in ETFs can provide long-term growth potential and enhance financial stability.

Conclusion

In conclusion, planning your return to India as an NRI involves more than just packing your bags. Addressing these five essential tasks and considering ETF investments can help you navigate the transition smoothly and take advantage of India’s economic growth. By proactively managing these aspects, you’ll not only ensure your financial well-being but also contribute to the nation’s development.

About the Author

CA Arun Tiwari, a Chartered Accountant and former EY employee, serves as the Chief Consultant of the NRI Desk and Influencer Desk at AKT Associates. He specializes in offering consultancy services tailored for NRIs and is dedicated to creating educational content to raise awareness within the NRI community.