Tips For Effective Nri Account Management

By Author: Shashank Bhaskar
Total Articles: 63
Comment this article

As you step out of India to make a living abroad, you attain the status of Non-Resident Indian. This changes a lot of things for you. You now get regulated under foreign law and have distinct privileges. It does not mean you lose connection with your home country. You still have financial obligations back home. Moreover, some NRIs prefer managing investments in India. Banks provide specialised financial products for these purposes.  
The primary one is an NRI Account. It is a Regular Savings Account for NRIs. You use it to manage your funds in India. There are two main classifications – Non-Resident External and Non-Resident Ordinary. The former is for managing foreign income, while the latter accepts Indian revenue. Choose the type based on your suitability. Besides account opening, follow these tips for effectively managing your funds:
Appoint POA
Digital Banking allows you to manage the NRO and NRE Accounts remotely. But certain formalities may require physical intervention. Banks ...
... let you appoint a power of attorney to handle the same. You choose a close family member, relative, or guardian. They perform the essential tasks on your behalf. There are rules to selecting a Non-Resident Indian or resident Indian for joint holding. It is best to check the same before appointing.
Create investments
The NRI savings Account is safe to park your funds and conduct banking activities. But if you seek to earn lucrative returns, you need to segregate your funds into investment instruments. The NRI Bank Account lets you link the funds to different avenues to fulfil this purpose. You use it to transfer your capital into Fixed Deposits, Equities, Debt Instruments, Debentures, Insurance, and other schemes.
Update documentation
The Reserve Bank of India directs banks to complete KYC requirements for all financial products. Hence, you need to submit general information like your name, age, address, etc., to open NRI Savings Account. These details must get backed by supporting documents. They include your passport-sized photographs, PAN Card, identity card, address proof, etc.
Additionally, you need updated documents to prove your NRI status. They include paperwork like your passport copy, work permit, overseas address proof, etc.
Understand the rules
The maintenance process of the NRI Savings Account online is simple. However, it gets governed by specific rules. You must follow the same for smooth account functioning. Standard terms relate to repatriation, taxation, deposit methods, withdrawals, transfers, etc.
Fulfil tax liabilities
You get relaxed taxation norms for an NRI Bank Account. The NRE deposits are tax-free because of the Double Taxation Avoidance Agreement (DTAA). This means they get taxed in a foreign country. On the other hand, the principal amount and interest on NRO Account get taxed in India. As it includes Indian income, pay taxes under the applicable income bracket.