A client from Dubai called us last month with an unexpected tax notice. He had been investing in India for 8 years without any issues.
But his situation had changed: he'd started spending more time in India visiting aging parents, his rental income had crossed ₹15 lakh, and he'd completely missed the 2020 tax residency rule changes.
What was once a compliant portfolio suddenly had compliance gaps worth lakhs in penalties.
This isn't rare. At Belong, we've helped thousands of NRIs navigate India investments. The pattern we see?
Life changes, regulations evolve, and currency dynamics shift. But most NRIs set up their investments once and forget to revisit the basics.
That single oversight can cost you tax efficiency, compliance, and sometimes years of returns.
This article walks you through five questions every NRI investor should ask themselves every 2–3 years. Not optional questions.
Critical ones that impact everything from how your income is taxed to whether your money can move freely between countries.
Why Periodic Reviews Matter More for NRIs Than Resident Investors
Resident Indian investors have it simpler. Their tax status stays the same year after year. Their bank accounts don't change categories. Their money doesn't need to cross borders.
NRIs operate in a different reality. You're juggling two tax jurisdictions, two currencies, and regulations that apply differently based on where you physically are.
A rule change in India's Finance Act can shift your entire tax liability. A few extra days spent visiting family can convert you from NRI to RNOR.
The Income Tax Bill 2025, effective from April 2026, reinforces this complexity.
High-income NRIs earning ₹15 lakh or more from Indian sources and staying 120 days or more in India may now be classified as RNOR instead of NRI.
Miss this change, and your foreign income could suddenly become taxable in India.
👉 Tip: Set a calendar reminder every January to review your India investment structure. The financial year runs April–March, giving you three months to make adjustments before the new year begins.
Question 1: Has My Residential Status Changed?
This is the single most important question. Everything else flows from it.
Your residential status under the Income Tax Act determines which income gets taxed in India. Get this wrong, and you could face double taxation, penalties, or both.
The Three Categories You Need to Know
NRI (Non-Resident Indian): Only Indian-sourced income is taxable. Foreign salary, overseas bank interest, capital gains from foreign assets? All exempt in India.
RNOR (Resident but Not Ordinarily Resident): Same taxation treatment as NRI. Your foreign income remains tax-free in India. This status can last 1–3 years after returning to India.
ROR (Resident and Ordinarily Resident): Your entire global income becomes taxable in India. Every dollar you earn anywhere in the world must be reported.
How Status Gets Determined
An individual qualifies as RNOR if they were non-resident for 9 out of the 10 preceding financial years, or stayed in India for 729 days or fewer during the 7 preceding financial years.
The key triggers for status change:
Trigger | What Happens |
|---|---|
Stay 182+ days in India | Become Resident |
Indian income exceeds ₹15 lakh + stay 120+ days | Classified as RNOR (from April 2026) |
Return permanently to India | Start RNOR clock (1–3 years) |
What Most NRIs Miss
A significant amendment targets individuals residing in tax-free jurisdictions like the UAE, Monaco, or Bermuda: Indian citizens earning ₹15 lakh or more from Indian sources but not paying taxes abroad will be treated as full tax residents of India.
This is the "deemed residency" provision. It applies even if you spend zero days in India. If you're earning significant rental income, dividends from Indian investments, or capital gains, this rule may apply to you.
👉 Tip: Use a residential status calculator before each tax season. Count your India days carefully including layovers. One extra day can change everything.
Question 2: Are My Bank Accounts Still Compliant?
Your NRE, NRO, and FCNR accounts aren't set-and-forget structures. They need to match your current residential status and investment strategy.
The Account Mismatch Problem
We see this constantly: an NRI opens accounts correctly when they first move abroad. Years later, they're using the wrong account for the wrong purpose.
Common violations:
Routing Indian salary through NRE (should go to NRO). Using a resident account after becoming NRI. Keeping NRE account active after returning to India permanently.
You cannot use a regular resident savings account as an NRI. You must open a designated NRI bank account.
Which Account for What Purpose
Account | Use For | Tax Treatment | Repatriation |
|---|---|---|---|
NRE | Foreign earnings | Interest tax-free | Fully repatriable |
NRO | Indian income (rent, dividends) | Interest taxable at 30% | Up to $1M/year with documentation |
FCNR | Foreign currency deposits | Interest tax-free | Fully repatriable |
Changes That Require Account Review
Job change: Moving between countries may change your "country of residence" on record with banks.
Return-to-India plans: If you're within 2–3 years of moving back, consider how your NRE FDs will be treated upon return.
New income sources in India: Started receiving rental income or business income? You need an NRO account.
👉 Tip: Review your bank statements annually. Ensure all credits match the account's intended purpose. Banks do flag mismatches, sometimes years later.
Question 3: Is My Investment Mix Still Aligned With My Life Stage?
Your investment allocation made sense when you set it up. Does it still?
Life changes that require portfolio review:
Getting married or having children. Approaching retirement. Parents in India needing financial support. Planning to return to India within 5–10 years. Children's education expenses approaching.
The Currency Allocation Question
This is where most NRI portfolios fall apart. You earn in AED or USD. You invest in INR. But have you calculated what that actually means?
While INR appreciation can enhance returns, depreciation can dilute gains.
A balanced portfolio usually combines rupee-denominated growth assets with foreign-currency stability instruments to manage this risk.
The rupee has depreciated roughly 3–5% annually against the dollar over the past decade. A mutual fund returning 12% in INR may only return 7–8% in USD terms after currency adjustment.
What to Review Every 2–3 Years
Asset allocation: Is your equity-debt split still appropriate for your age and goals?
Geographic split: How much is in India vs. your country of residence? Does this match where you'll spend the money?
Currency exposure: Are your Indian investments hedged with any USD-denominated options like GIFT City FDs?
Life Stage | Recommended India Allocation | Rationale |
|---|---|---|
Building career (30–40) | 40–60% of total | Higher growth, time to recover from volatility |
Peak earning (40–50) | 30–50% | Balance growth with stability |
Pre-retirement (50+) | 20–40% | Shift toward where you'll spend |
The GIFT City Option
GIFT City investments offer something unique: USD-denominated instruments within India's regulatory framework. You get Indian regulatory protection without currency risk.
Compare your options using our NRI FD comparison tool to see how GIFT City rates stack up against traditional NRE FDs.
👉 Tip: Match your investment currency to your eventual spending currency. If you'll retire in India, rupee investments make sense. If you might stay abroad, maintain USD exposure.
Question 4: Have Tax Rules Changed Since I Last Reviewed?
Indian tax laws for NRIs change almost every budget cycle. What was optimal three years ago may now be inefficient or non-compliant.
Recent Changes That Matter
Capital gains tax revision (2024):
Short-term equity gains: 20% (previously 15%). Long-term equity gains above ₹1.25 lakh: 12.5% (previously 10% above ₹1 lakh). Debt fund gains now taxed at slab rates regardless of holding period.
TDS on mutual fund redemption:
Tax depends on the type of investment. For instance, NRO FD interest is taxed at 30%, short-term equity gains at 15%, and long-term debt fund gains at 20%. TDS is usually applied.
DTAA benefits:
Your Double Taxation Avoidance Agreement with India determines how much tax relief you can claim. The India-UAE DTAA, for example, offers specific provisions for interest income and capital gains.
Tax Compliance Checklist
Action | Frequency | Why It Matters |
|---|---|---|
Verify TDS deductions | Annually | Ensure correct rate applied based on DTAA |
Claim TDS refunds via ITR | Annually | NRIs often have excess TDS deducted |
Review DTAA provisions | Every 2–3 years | Treaties get amended |
Check new exemptions | Each budget | Finance Act changes annually |
The ITR Filing Question
Many NRIs assume they don't need to file returns in India. That's only true if your Indian income is below ₹2.5 lakh AND all applicable TDS has been deducted.
If you want to claim TDS refunds on excess deductions, you must file. If you've sold property or investments with capital gains, you must file. If your income exceeds the basic exemption, you must file.
👉 Tip: Even if filing isn't mandatory, consider filing anyway. It creates a clean documentation trail if you ever need to prove your NRI status or income sources.
Question 5: Does My Strategy Still Match My Return-to-India Timeline?
This question separates thoughtful NRI investors from reactive ones.
Your return-to-India plans directly impact how you should structure investments today. Whether you're returning in 3 years, 10 years, or never, your portfolio should reflect that timeline.
If You're Returning Within 5 Years
Your focus should shift toward:
Maximizing RNOR benefits: Duration: Can last up to 3 financial years after returning, depending on your NRI history. Structure your investments to take advantage of this tax-efficient window.
Realizing foreign capital gains before return: Gains on foreign assets aren't taxable while you're NRI or RNOR. Once you become ROR, everything is taxable.
Converting foreign retirement accounts: US 401(k), UK pension, UAE gratuity? Plan withdrawals during RNOR period when they're not taxable in India.
Building India-side infrastructure: Open the accounts you'll need as a resident. Research health insurance options. Understand how your investments will be treated after return.
If You're Staying Abroad Long-Term
Your priorities differ:
Maximize repatriation-friendly investments: NRE accounts and GIFT City products allow easy movement of principal and returns back to your country of residence.
Document everything for your host country: Many countries require reporting of foreign financial assets. Maintain clean records of all India investments.
Consider GIFT City for tax efficiency: GIFT City mutual funds and FDs offer tax benefits that regular Indian investments don't provide to NRIs staying abroad.
If You're Undecided
This is the trickiest position. You don't want to optimize for one scenario and be stuck if life goes differently.
The balanced approach:
Maintain both NRE and NRO accounts. Keep some investments in USD-denominated instruments. Avoid very long lock-in periods (7+ year insurance plans, illiquid real estate). Review annually as your thinking evolves.
👉 Tip: Your return timeline can change. Review this question honestly every 2–3 years. Many NRIs who "planned to return in 5 years" are still abroad 15 years later.
Building Your Review Calendar
Structure matters. Here's how to systematically review these five questions:
January (before tax season):
Count your India days for the current financial year. Estimate your Indian income for the year. Check if any tax rules have changed.
April (start of new financial year):
Verify bank account status matches your current situation. Review any mature FDs or completed SIP cycles. Rebalance portfolio if needed.
July (ITR deadline):
File your return or confirm filing isn't required. Claim TDS refunds if applicable. Update KYC with fund houses if anything has changed.
October (mid-year check):
Review return-to-India timeline. Check currency exposure and exchange rates. Evaluate if current investment strategy still makes sense.
What Happens When You Skip Reviews
The costs of neglecting periodic reviews:
Tax penalties: Using wrong residential status can trigger back-taxes plus interest plus penalties.
Frozen accounts: Banks freeze accounts when KYC lapses or status mismatches emerge. Unfreezing requires documentation and time.
Missed opportunities: Tax-saving investments have annual limits. Miss a year, and that window is gone forever.
Repatriation complications: Moving money out of India becomes harder when documentation gaps exist.
How We Help NRIs Stay on Track
At Belong, we've built tools specifically for these periodic reviews:
NRI FD Rates Comparison: Compare rates across NRE, NRO, FCNR, and GIFT City FDs. See which option works best for your current situation.
GIFT City Mutual Funds Explorer: Explore USD-denominated mutual fund options that offer tax efficiency and currency protection.
GIFT City AIFs: For qualified investors looking at alternative investment structures.
GIFT Nifty Tracker: Monitor international trading indicators that affect your India investments.
Your Next Step
Reviewing your NRI investment structure doesn't have to be overwhelming. Start with question one: has your residential status changed?
Many NRIs in our WhatsApp community share similar concerns. They discuss regulatory changes, compare FD rates, and help each other navigate complex situations. Join the conversation.
Download the Belong app to access our comparison tools, track your investments, and stay updated on changes that affect NRI investors. The review process becomes much simpler when you have the right tools.
Disclaimer: This article is for educational purposes only and does not constitute financial or tax advice. Tax laws and regulations change frequently. Consult a qualified tax advisor for advice specific to your situation.
