Returning Indian/Recent Immigration
Returning Indian (RI) & Recent Immigration – Classic Partner
NRI Tax & FEMA Advisory for Smooth Transitions
At Classic Partner, we assist Non-Resident Indians (NRIs) and Indian citizens relocating abroad in managing their tax, financial, and FEMA compliance responsibilities. Whether you’re a Returning Indian planning to settle back in India or a Recent Immigrant leaving India to settle overseas, our Chartered Accountants ensure that your transition is seamless, legally compliant, and financially optimized.
Returning Indian (RI) – NRI Returning to India
When an NRI decides to return permanently to India, their financial, legal, and tax responsibilities change. Income may arise from both India and overseas, making it essential to comply with the Income Tax Act, 1961 and the Foreign Exchange Management Act (FEMA), 1999.
1. FEMA Compliance for Returning NRIs
- Notify banks, depositories, and mutual fund houses to reclassify your status from Non-Resident to Resident.
NRO Account → Convert to Resident Account
NRE Account → Convert to Resident or RFC Account
FCNR Account → Can be held until maturity, then re-designated
RFC Account Advantage:
Fully repatriable and maintained in foreign currency
Interest income exempt under Section 10(15)(iv)(fa) while RNOR
Useful for managing overseas payments after return
2. Repatriation Limits Post-Return
As NRI: Up to USD 1 million per financial year from NRO account
As Resident: Up to USD 250,000 per year under Liberalized Remittance Scheme (LRS)
3. Income Tax Compliance for Returning NRIs
Non-Resident (NR): Foreign income not taxable
Resident but Not Ordinarily Resident (RNOR): Foreign income exempt (except if controlled from India)
Resident & Ordinarily Resident (ROR): Global income taxable in India
Strategic tax planning can help maintain RNOR status for 2–3 years, reducing exposure on foreign income.
Additional Compliance:
Schedule FA & AL disclosure for high-income taxpayers (₹50L+ income)
Interest on NRE deposits becomes taxable once FEMA status changes to Resident
4. Special Considerations for Returning Indians
Pensions from overseas employers → May be taxed in India (check DTAA benefits)
Capital gains on overseas assets → Not taxed if NR/RNOR, but taxable for ROR
Convert NRE deposits to RFC deposits for continued tax benefits
Recent Immigrant – Indian Citizen Settling Abroad
A Recent Immigrant is an Indian citizen who leaves India to settle abroad for work, business, or personal reasons. Once your residential status changes, tax and FEMA rules apply differently.
1. FEMA Compliance for Recent Immigrants
Inform banks, brokers, and mutual funds to reclassify accounts:
Resident savings/current account → NRO account
Fixed deposits → NRO FD
Shares, bonds, mutual funds → Can be retained with status update
Immovable property in India can be retained.
2. Overseas Investments & Business Ownership
Investments made under LRS can usually be continued.
Business ownership in India (proprietorship, partnership, directorship) can continue.
Overseas business operations under ODI scheme remain permissible with compliance.
3. Bank Accounts – Key Rules
NRO Account: For Indian income (rent, dividends, pension). Taxable.
NRE Account: For foreign income. Fully repatriable. Tax-free interest (while NRI).
FCNR Account: Term deposit in foreign currency. Tax benefits available while NRI.
Once you become a Recent Immigrant, you’re not eligible to remit funds under LRS.
4. Taxation under Income Tax Act, 1961
Only Indian-source income is taxable once you become a Non-Resident.
Inform banks, employers, and payers of your new status to ensure correct TDS.
File your ITR as Non-Resident in India for future years.
DTAA (Double Tax Avoidance Agreement) can be used to avoid double taxation.
5. Financial Steps Before Leaving India
Re-designate bank accounts (Resident → NRO/NRE)
Inform banks, mutual funds, and PPF authorities of status change
Avoid extending PPF while NRI
Apply for Tax Residency Certificate (TRC) in new country
Consider a Power of Attorney (PoA) for ease of handling Indian assets
Why Choose Classic Partner for Returning Indians & Recent Immigrants?
- Chartered Accountants with NRI & FEMA expertise
- End-to-end assistance for account re-designation & repatriation
- Cross-border tax planning to optimize global liabilities
- Guidance on DTAA benefits & TRC applications
- Assistance with ITR filing, disclosures, and compliance
Consult Classic Partner Today
Whether you’re coming back to India or moving overseas, Classic Partner ensures your financial transition is fully compliant and hassle-free.
Contact us now for NRI, FEMA, and cross-border tax advisory services.
