Financial Tips for NRIs Returning to India

A large number of Indians go overseas and settle there for better job opportunities and career. However, coming back to India after a long time can pose challenges.

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One of the most important considerations for NRIs coming back to India is the finances. The following are some of the most helpful tips in that regard:

Investments

Coming back to India, an NRI would want to invest the money they have earned during their stay overseas. However, considering that they are unlikely to have kept up with the market fluctuations in India, it’s best to choose safer investments.

For instance, mutual funds are an ideal choice because they offer high yields and are managed by professional fund managers. NRIs with a high risk tolerance can invest in equity mutual funds which are invested in companies.

Similarly, the ones with a low risk tolerance can invest in debt mutual funds. There is an option of balanced funds too that invest in both types of assets.

For a completely safe investment, NRIs can also consider fixed deposits.

Insurance Policy

It’s possible that the life insurance policy an NRI bought in a foreign country provides cover in India as well. However, it’s unlikely for the same to apply to health cover too, as it’s usually geography-dependant. So, they need to look into that.

The Income Tax department gives tax benefits on insurance premiums in India. So, an NRI should take that into account when calculating their taxable income as well.

Tax Preps

Taxes are bound to become complicated for an NRI as they are used to the rules and regulations of the foreign country. However, the following sum up their tax implication in India:

• NRIs have to figure out their tax applicability with regard to two regulations: Income Tax Act (ITA) and the Foreign Exchange Management Act (FEMA). The latter bears a high significance as it covers foreign investments and transactions.
• NRIs should also check what they are bringing from their foreign residence to India as that could be covered under the Customs Act. There is a customs duty up to Rs. 75,000 for household articles, etc. brought from a foreign country by an NRI.

Indian government takes utmost care when it comes to NRIs returning to India. So, they must do their homework lest they should get tangled in red tape.