I still remember the call from Rajesh last month. He'd been in Dubai for 12 years, built a solid career, saved well, and was finally ready to return home.
But he was terrified. "Ankur, I have NRE accounts, FCNR deposits, investments in the US, property in Dubai - what happens to all of this? Will I lose money? Will I get taxed twice?"
His fears aren't uncommon. At Belong, we work with dozens of NRIs every month who are planning their return to India. The questions are always the same: What do I convert? What can I keep? How do I avoid mistakes that cost me lakhs?
This article is your complete financial checklist - everything you must do before you step back onto Indian soil. We'll cover banking, investments, tax status, insurance, documentation, and the tools that make this transition seamless.
By the end, you'll know exactly what to do, when to do it, and how to protect your wealth while coming home.
Why Financial Planning Matters More Than You Think
Moving back isn't just about booking flights and shipping furniture.
Your residential status for income tax in India changes the moment you meet certain criteria. That changes your tax liability, account types, investment permissions, and repatriation rights.
According to the Reserve Bank of India (RBI), you cannot continue to hold NRO or NRE bank accounts once you permanently relocate to India.
If you fail to convert these accounts within a reasonable period, you could face penalties or compliance issues under the Foreign Exchange Management Act (FEMA).
So let's get started - here's your complete checklist, organized by priority and timing.
Understanding Your Timeline: When to Start Planning
Start planning at least 6 to 12 months before your intended move.
Why so early? Because some tasks - like selling property, closing investments, or understanding tax implications - take time. Rushing through them leads to costly mistakes.
Here's a rough timeline:
Time Before Move | Key Tasks |
|---|---|
6-12 months | Research tax implications, understand RNOR status, plan investment exits, research housing in India |
3-6 months | Convert NRI accounts, update investment portfolios, close or retain foreign accounts, arrange insurance |
1-3 months | Update PAN, Aadhaar, demat accounts, notify fund houses, finalize shipping and logistics |
Immediately upon arrival | Open resident savings account, link to investments, file tax returns, update KYC everywhere |
👉 Tip: Don't wait until the last month. Indian banking and regulatory processes can take weeks, and you don't want to be stuck abroad with frozen accounts.
1. Understand Your Residential Status (This Affects Everything)
Your tax residential status determines your tax liability, account types, and investment permissions.
There are three categories under Indian income tax law:
- Non-Resident (NR): Only Indian income is taxable.
- Resident but Not Ordinarily Resident (RNOR): Indian income is taxable; foreign income is usually exempt.
- Resident and Ordinarily Resident (ROR): Global income is taxable in India.
You become a resident in India if you stay for 182 days or more in a financial year, or if you stay for 60 days or more in the current year and 365 days or more in the preceding four years.
RNOR status applies if you've been an NRI for 9 out of the past 10 financial years, or if you've stayed in India for 729 days or less during the preceding 7 years.
Why does this matter? As an RNOR, you can keep your foreign income tax-free in India for up to 2-3 years. This is a massive benefit if you're still receiving overseas salary, pension, or rental income.
Use Belong's Residential Status Calculator to determine your status instantly. It's free, accurate, and helps you plan your tax strategy.
2. Convert Your NRI Bank Accounts (Mandatory)
This is non-negotiable.
RBI mandates that you convert your NRE and NRO accounts to resident accounts once you become a resident. Failing to do so can lead to penalties under FEMA.
Here's what you need to do:
NRE Account
You have two options:
- Convert to a Resident Savings Account: Most common option. Your rupee balance stays in rupees.
- Convert to a Resident Foreign Currency (RFC) Account: If you want to hold foreign currency (USD, GBP, EUR) for future foreign expenses like children's education or travel.
RFC accounts allow returning NRIs to park their foreign earnings without repatriation limits. The interest earned on RFC accounts is tax-free only during your RNOR period.
NRO Account
You must convert your NRO account to a resident savings account or close it. Since NRO accounts hold India-sourced income (rent, dividends, pension), converting to a resident account is straightforward.
FCNR Deposits
You can hold your FCNR fixed deposits until maturity. After that, transfer the proceeds to a resident account or an RFC account.
👉 Tip: Visit your bank in person or contact your relationship manager with proof of residential status change (visa cancellation, return ticket, etc.). Most banks process conversions within 7-10 working days.
Compare the best NRI fixed deposit rates before deciding where to park your funds post-conversion.
3. Decide What to Do with Foreign Bank Accounts
You are not required to close your overseas bank accounts when you return to India.
As per RBI, you can continue to hold international bank accounts that you opened while you were an NRI. However, you must check whether the foreign country's regulations allow you to maintain these accounts as a non-resident of that country.
For example:
- US banks: Most allow you to keep accounts, but inform them of your address change.
- UAE banks: Some require Emirates ID renewal; others may freeze accounts if you're not a resident.
What You Must Do
- Inform the bank about your change in residential status.
- Update your address to an Indian address.
- Check if the account attracts higher fees or restrictions.
- Declare these accounts in your Indian Income Tax Return (ITR) under the Foreign Assets schedule.
👉 Tip: Keep at least one foreign bank account active if you have ongoing expenses abroad or plan to travel frequently. It simplifies currency management.
Learn more about NRI account charges to understand how fee structures change post-return.
4. Update Your Investment Portfolio
Your investments in India need immediate attention once your status changes.
Mutual Funds
If you've invested in mutual funds as an NRI, you must inform the Asset Management Company (AMC) or your mutual fund distributor about your change in residential status.
Update your linked NRI bank accounts to resident savings accounts to ensure smooth SIP payments and redemptions.
Most AMCs allow online status updates through their investor portals. You'll need to submit:
- Updated KYC documents
- Proof of residential status change
- New bank account details
Read our guide on how NRIs can invest in mutual funds in India to understand the full process.
Stocks and Demat Accounts
You must inform your bank and broker about your new residency status. Open a new resident demat account and transfer your securities from the NRI demat account to the new account.
You'll also need to close your Portfolio Investment Scheme (PIS) account. PIS is only for NRIs investing in Indian stocks; residents don't need it.
Update your KYC and FATCA/CRS declarations as applicable.
Check out best investment platforms for NRIs to compare brokers and their account conversion processes.
Real Estate Investments
If you own property in India, good news - no changes are required. You can continue to hold it as a resident.
If you own property abroad:
As per FEMA regulations, you are permitted to continue holding overseas assets that you invested in as an NRI. However, check the foreign country's rules to ensure compliance.
Any rental income or capital gains from foreign property will become taxable in India once you're an ROR. You can claim relief under the Double Taxation Avoidance Agreement (DTAA) to avoid paying tax twice.
Explore NRI capital gains tax rules to plan your property sales strategically.
5. Manage Retirement Accounts Carefully
If you've contributed to foreign retirement accounts - like a 401(k) in the US, a pension plan in the UK, or a superannuation fund in Australia - handle these with care.
Withdrawing the entire corpus before moving can lead to significant tax liability in the foreign country. Consult a cross-border tax advisor before making any decisions.
During RNOR Status
As an RNOR, foreign retirement income is generally not taxable in India unless remitted to India. This gives you a window to liquidate or restructure without Indian tax impact.
After Becoming ROR
Once you're an ROR, all global income - including retirement withdrawals - becomes taxable in India. You can claim DTAA relief to reduce double taxation.
👉 Tip: Use the RNOR window wisely. Dispose of foreign assets, withdraw retirement funds, or restructure investments before your status changes to ROR.
Learn about DTAA between India and the USA if you're returning from the US.
6. Tax Filing and Compliance
Understanding your tax obligations is critical.
File Your Final NRI Tax Return
Before you become a resident, file your final tax return as an NRI. Declare all Indian income (rent, interest, capital gains) and claim applicable deductions.
Understand RNOR Tax Benefits
As an RNOR, only your Indian income is taxable. Foreign income earned and received outside India is generally not taxable.
You can use this window to dispose of foreign assets like IRAs abroad without tax liability in India.
RNOR status typically lasts for 2-3 financial years after your return, depending on your stay pattern.
Plan for ROR Taxation
Once you become an ROR:
- Global income becomes taxable in India
- You must declare foreign assets in your ITR
- Interest on RFC and FCNR accounts becomes taxable
Under the new tax regime (effective from AY 2024-25), it is the default option, but you can opt for the old regime if deductions benefit you more.
Read our detailed guide on NRI taxation, DTAA benefits, and ITR filing to stay compliant.
👉 Tip: Hire a qualified Chartered Accountant (CA) who specializes in NRI taxation. Don't rely on generic tax filing portals - they often miss nuances.
Avoid common NRI tax filing mistakes by following best practices.
7. Update Your Documentation
Several documents need immediate attention.
PAN Card
Ensure your Permanent Account Number (PAN) is active and linked to your Aadhaar. If you don't have a PAN, apply for one immediately - it's mandatory for all financial transactions in India.
Learn how to get a PAN card for NRIs if you don't have one yet.
Aadhaar Card
If you left India before Aadhaar became mandatory, apply for it as soon as you arrive. Aadhaar is now required for:
- Opening bank accounts
- Filing tax returns
- Investing in mutual funds
- KYC updates
Read our guide on Aadhaar card for NRIs for the application process.
Passport
Renewing your passport from India is quicker than renewing it from Indian embassies abroad. If your passport is expiring soon, renew it in India to save time.
Check our article on Indian passport renewal in the UAE if you're still abroad.
👉 Tip: Link your PAN with your Aadhaar before updating your NRI bank account. This avoids complications during account conversion.
8. Reassess Your Insurance Coverage
Your foreign insurance policies may not be valid in India.
Health insurance providers in foreign countries typically don't provide coverage in India. Life insurance policies purchased abroad may also not be valid once you return.
Health Insurance
Buy a comprehensive health insurance plan for yourself and your family as soon as you return. India has excellent health insurance options at affordable premiums.
Look for policies that offer:
- Cashless hospitalization
- High sum insured (at least ₹10-20 lakhs per family)
- Coverage for pre-existing diseases after waiting period
- No sub-limits on room rent
Life Insurance
Opt for plain vanilla term insurance that offers maximum coverage at low premiums. Avoid investment-linked insurance plans (ULIPs) unless you fully understand them.
Explore best life insurance plans for NRIs for comprehensive coverage options.
Existing Indian Policies
Life insurance policies purchased in India should remain valid upon your return, provided you've paid all due premiums. Notify your insurer of your residential status change and update your bank account information.
9. Plan for Your Children's Education
If you're moving with school-age children, research education options early.
International schools offering IGCSE or International Baccalaureate were once only for the wealthy, but now many affordable options exist.
Options include:
- Indian curriculum schools: CBSE, ICSE - familiar to most parents
- International schools: IB, IGCSE, Cambridge - easier transition for children educated abroad
- Online/hybrid schools: Growing in popularity post-pandemic
👉 Tip: Admissions to good schools in metro cities (Delhi, Mumbai, Bengaluru) are competitive. Apply 6-12 months in advance.
Check out our guide on best Indian schools in Dubai for comparison if you're still abroad.
10. Consider GIFT City Investments for Tax Efficiency
If you want to continue investing in USD-denominated assets without the hassle of foreign accounts, consider GIFT City.
GIFT City (Gujarat International Finance Tec-City) is India's first International Financial Services Centre (IFSC). It allows NRIs and returning Indians to invest in global assets under Indian jurisdiction.
Why GIFT City?
GIFT City offers ease of compliance, global investment opportunities, cost-effectiveness, and access to international markets without relying on foreign intermediaries.
Key benefits:
- Tax-free returns: Interest on GIFT City fixed deposits is tax-free for RNORs
- USD-denominated investments: Protects against rupee depreciation
- Simplified repatriation: No TCS or LRS limits
- Access to global funds: Invest in US stocks, bonds, and Alternative Investment Funds (AIFs)
At Belong, we specialize in GIFT City investments. We've helped hundreds of NRIs invest in USD fixed deposits through GIFT City with interest rates up to 5% p.a., fully tax-free during RNOR status.
Compare GIFT City FD vs FCNR vs NRO and NRE FDs to see which works best for you.
👉 Tip: Open a GIFT City FD before you lose your RNOR status. The tax-free interest can save you lakhs over 2-3 years.
Use Belong's NRI FD Comparison Tool to compare rates across GIFT City, NRE, NRO, and FCNR deposits at a glance.
11. Estate Planning and Nomination Updates
Moving back to India is a good time to review your estate planning.
Will
Add a nominee or joint account holder to your NRO accounts on a "former or survivor" basis. This allows the nominee to access funds without executing a will in case of your death.
If you have assets in multiple countries, consider having separate wills for each jurisdiction to simplify probate.
Read our guide on wills for Indian expats in the UAE for cross-border estate planning.
Nominations
Update nominations across all your financial accounts:
- Bank accounts
- Fixed deposits
- Demat accounts
- Mutual funds
- Insurance policies
- Provident Fund (PF) and pension accounts
12. Use Belong's Tools to Simplify Your Transition
We've built a suite of free tools specifically to help NRIs like you navigate this transition smoothly.
1. Residential Status Calculator
Calculate whether you're NRI, RNOR, or ROR based on your stay in India. Know your tax liability instantly.
2. NRI FD Rates Comparison Tool
Compare FD rates across NRE, NRO, FCNR, and GIFT City deposits from HDFC, ICICI, SBI, Axis, and more - all in one place.
3. Compliance Compass
Check if you're compliant across banking, investments, and taxation. Designed for NRIs, RNORs, and OCI holders.
4. GIFT Nifty Live Tracker
Track the Indian equity markets in real-time - over 20 hours a day - to make informed investment decisions.
5. Rupee vs Dollar Tracker
Monitor INR-USD exchange rates and historical trends. Understand why USD-denominated investments protect your wealth.
👉 Tip: Bookmark these tools and use them throughout your transition. They're free, updated daily, and built by experts who understand NRI needs.
Common Mistakes to Avoid
We've seen dozens of returning NRIs make these mistakes. Don't be one of them.
1. Not Converting Accounts on Time
Delaying account conversion can lead to FEMA penalties and frozen accounts. Convert within 30-60 days of becoming a resident.
2. Closing All Foreign Accounts
Keeping at least one foreign account active is smart - especially if you have ongoing expenses, travel frequently, or have children studying abroad.
3. Ignoring RNOR Status
RNOR status is a golden window to liquidate foreign assets tax-free in India. Don't waste it.
4. Not Updating Investments
Mutual funds, demat accounts, and insurance policies must be updated with your new status. Failing to do so can cause redemption delays and tax complications.
5. Skipping Professional Tax Advice
Indian tax law is complex. A qualified CA specializing in NRI taxation will save you more in taxes than they cost in fees.
6. Forgetting to Declare Foreign Assets
ROR taxpayers must disclose foreign assets in their Income Tax Returns (ITR). Non-disclosure can lead to penalties.
Final Checklist: 30 Days Before You Move
Here's a quick checklist for the final month:
- [ ] Inform your bank about account conversions
- [ ] Update mutual fund and demat account details
- [ ] Notify insurance companies of status change
- [ ] File final NRI tax return
- [ ] Update PAN and Aadhaar
- [ ] Close or retain foreign bank accounts (inform the bank)
- [ ] Buy health and term insurance in India
- [ ] Research schools if moving with children
- [ ] Open a resident savings account in India (or have it ready)
- [ ] Download the Belong App to track your investments and stay updated
Conclusion: Come Home with Confidence
Moving back to India is exciting - but it comes with financial complexity.
Convert your accounts on time. Understand your tax status. Update your investments. Use the RNOR window wisely. And don't forget to protect your wealth with the right tools and advice.
At Belong, we've helped hundreds of NRIs transition smoothly. We've built tools, resources, and a community to support you every step of the way.
Ready to Make Your Move?
Join Belong's WhatsApp Community – Connect with other returning NRIs, ask questions, and get expert advice. 👉 Join here
Download the Belong App – Access USD fixed deposits in GIFT City, track your investments, and use our free financial tools. 👉 Download now
Welcome home. Let's make your financial transition seamless.
Sources
- Reserve Bank of India (RBI) - FEMA Guidelines for Returning NRIs
- Income Tax Department - Residential Status and Tax Implications
- ICICI Bank - NRIs Returning to India: Financial Guide
- HDFC Bank - Financial Steps for NRIs Returning to India
- ClearTax - Residential Status Under Section 6 of Income Tax Act
- India Briefing - New Tax Residency Rules for NRIs
- HDFC Life - NRI Returning to India Guide
- BackToIndia - Return to India Checklist
- Arthgyaan - Understanding RNOR Tax Status
- PwC - India Individual Residence Rules
