Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

Someone rightly said “Change is the only constant in life” but few changes are really tough like the change in residential status for NRIs.

Are you an NRI who is planning to return to India? Or are you a resident Indian who will become an NRI?

Either way, there are certain steps to be taken regarding financial matters. You need to take care of your Demat, Bank account, MFs, etc. to ensure that the type of account that you operate matches your residency status.

NRI Change in Residential Status
How Change in Residential Status Affects NRI Accounts

Must Read – Can NRI Continue With Resident Savings Account?

NRI Change in Residential Status Affects NRI Accounts

Let us look at different NRI accounts and the action to be taken when residential status changes –

Bank Accounts

Resident Indian to NRI

NRIs cannot hold normal savings accounts in India. NRIs can open an NRE or NRO account to deposit their earnings.

An NRE account can be opened as a savings or a term deposit account. A resident Indian can be made a joint account holder. Funds from the NRE account can be transferred to the NRO account. Only foreign income can be deposited in NRE accounts. Interest earned in this account is tax-free.

An NRO account can be opened as a savings account or a term deposit account. A resident Indian can be a joint account holder. Only income from India can be deposited in this account. Interest earned in this account is taxable.

NRIs have to convert their resident fixed deposits to NRO deposits.

NRIs can open FCNR accounts to have term deposits. Deposits can be made only in foreign currency. Interest and principal amounts are tax-free. Resident Indians cannot be joint holders of this account.

Process – Visit the bank branch and fill the relevant forms and submit them along with identity proof-related documentation, passport, and visa.

Must Read – FCNR account for NRI – Secret Revealed

NRI to Resident Indian

NRIs have to convert the NRE and NRO savings to resident savings accounts. NRIs have the option to convert savings accounts to RFC accounts till the time the residency status is RNOR status.

Fixed deposits in FCNR and NRE accounts can be as-is until the maturity date. They can be changed to Resident Foreign Currency accounts after maturity.

Process – The NRI has to give a declaration to redesignate NRE/NRO account to the Resident Savings account Details like customer id, account number, etc. should be filled up, signed, and submitted at the local branch of the bank.

NRIs can operate resident bank a/c on ‘either or survivor’ basis. wiseNRI

Must Read – Investment Options for NRI in India

Demat Account

Resident Indian to NRI

NRIs have to close the Demat account that they held when they were resident Indians. They have to open a new Demat account or Portfolio Investment Scheme (PINS) account with a bank. They can buy and sell shares using this account. Sales proceeds can be repatriated to the NRE savings account.

An NRI can have only one PINS account.

Process – The authorized dealer and the depository participants must be informed of the status change.

Read – All About Mandate Holder In Bank Account – by NRIs

NRI to Resident Indian

NRIs cannot continue with the NRI Demat account when they become resident Indians. They have to open a resident Demat account and transfer all existing investments to it.

While you were a resident Indian, will have to be closed and you would need to transfer the shares to an NRO Demat account. You can continue to hold these shares in the NRO Demat account or sell them. If you sell them, the proceeds are credited to the NRO savings account.

If you want to buy shares from the secondary market as an NRI, you would need to open a Portfolio Investment Scheme Account with a bank. In this scheme, you can buy shares with funds in your NRE account and sale proceeds can be credited to your NRE account for repatriation.

Process – The authorized dealer and the depository participants must be informed of the status change.

Must Check this List – Wealth Planning Checklist for NRIs

Mutual Funds

Resident Indian to NRI

The mutual funds can be held when the resident status changes.

Process – The NRI should write a letter to individual AMCs along with proof of NRI bank accounts, KYC documents, passport, overseas address proof.

NRI to Resident Indian

The mutual fund units can be held when the resident status changes.

Process – Write a letter to individual AMCs with folio no stating your change of Status from NRI to Resident individual and attach the canceled cheques of your old NRE/NRO and the new resident account.

PPF Account

Resident Indian to NRI

An NRI cannot open a PPF account. But if he had opened a PPF account when he was a resident Indian, he can hold that account till its maturity.

Process – He can invest the amount in it as An Non-Resident Indian using funds in NRE or NRO accounts.

If he wants to close it, he can use the withdrawal form to do so along with attestation from the bank where the NRE/NRO account is present.

Check – What is RFC Account?

NRI to Resident Indian

Process – The NRI will have to invest money from a Resident savings account.

If he wants to close the account, he will have to fill the withdrawal form along with relevant forms.

NPS Account

Note: NPS detail is purely based on information received from an NRI – if you have some different views please share in the comment section.

Resident Indian to NRI

A Resident Indian will have to close the NPS account when his residency status changes. As an NRI, he can open another NPS account. He can have only one NPS account.

Process – There are two ways –

He can open the account through eNPS if he as an Aadhaar or PAN card. It can be done from the eNPS website.

He can download the NRI NPS form, complete it and submit it to the bank branch.

The amount will have to be remitted through the NRE/NRO account.

Change in Residential Status
NRI Change in Residential Status

NRI to Resident Indian

NRIs have to close the NPS account that they opened as NRIs. They can open a new NPS account when they become resident Indians. The NPS account cannot be transferred when citizenship changes.

Process – There are two ways –

He can open the account through eNPS if he has an Aadhaar or PAN card. It can be done from the eNPS website.

He can download the NRI NPS form, complete it and submit it to the bank branch.

The amount will have to be remitted through the resident savings bank account.


Resident Indian to NRI

A policy taken as a Resident Indian will be valid when you become An Non-Resident Indian. You will have to understand the claim rules and procedure for the status change. You have to inform the company about the change in residency status.

NRI to Resident Indian

NRIs can continue with their life insurance policies that have been purchased abroad. They can also continue with the policies they purchased in India as NRIs. They have to inform the company about the change in residency status.

Hope this gives you some idea about the actions that you have to take when your residential status change. If you find any discrepancy or change happened after we published – please add a comment.

If you have any questions related to residential status feel free to ask.

Published on December 8, 2021

Hemant Beniwal

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

    • Hi Umashanker Singh,
      Get in touch with your NPS service provider or the bank through which you opened your NPS account. They will guide you through the process and provide you with the necessary forms and information. You will typically need to fill out a “Change of Status” form. This form is used to update your NPS account status from NRE to a resident.

  • Hi,

    Thanks for this write-up. Can you improve it by including information for OCIs who are now living in India? Should they follow the suggestions that you have mentioned for ‘Residents’ here or are there different rules (for each of these asset classes)?

    • Hi Karan,

      If you have not been an NRI in the previous financial year, you are considered RNOR if you are in India for 729 days or less during the seven financial years preceding the current financial year.

    • Hi Randeeprv,

      If you accidentally opened a PPF account after becoming an NRI, there are certain rules and regulations you need to be aware of. PPF accounts are typically meant for Indian residents, and NRIs are not eligible to open new PPF accounts.

  • I already have nri and i have nre and nro account. And im investing in stocks using one of my resident savings account Should i convert my trading ordinary account to nro or Should i tranfer my trading account to account already nre or neo

    • Hi Sree,
      If you have an NRE account, you can open an NRE trading account with a registered broker in India. An NRE trading account allows you to invest in the Indian stock market using funds held in your NRE account. The advantage of this approach is that it keeps your investments and income in Indian stocks entirely in the NRE status, which means it is fully repatriable, and the income is tax-free in India.

  • Hello,
    My resident status in India changes from year-to-year for eg for FY2022-23 I am tax resident in India, but FY2023-24, I will be non-resident. In such a situation, is it possible to switch NRE/NRO savings a/c back-and-forth to resident savings, or are such changes more long lasting?

    Thank you for your excellent post

    • Hi RPalany,
      It’s important to note that tax residency status changes cannot be switched back and forth casually. They are based on specific criteria set by the tax authorities and are typically determined for each financial year based on your physical presence and other factors. Once your tax residency status is established for a particular financial year, it remains so for that year, you need to inform your bank about the change in your tax residency status, they will guide to in changes for your account.

  • I have NRE fixed deposits which will mature in March 24. I am converting my account to resident.What action do i need to take

    • Hi Anil

      As per my knowledge If you have Non-Resident External (NRE) fixed deposits that are going to mature in March 2024 and you are converting your account to resident status, there are a few actions you may need to take. Here’s a general guide:

      Contact your bank: Get in touch with your bank where the NRE fixed deposits are held and inform them about your intention to convert your account to resident status. They will guide you through the necessary steps and provide you with the required forms and documentation.

      Provide updated KYC documents: As you are changing your residency status, you will need to provide updated Know Your Customer (KYC) documents to the bank. These may include proof of address, proof of identity, and any other documents required by the bank. Make sure to inquire with your bank about the specific documents they require for the conversion process.

      Update your tax status: Once your account is converted to resident status, you will be subject to tax laws applicable to residents in your country. Consult with a tax professional or the appropriate tax authority to understand your tax obligations and ensure compliance.

      Evaluate investment options: Once your fixed deposits mature, you may want to explore different investment options for your funds as per your financial goals and risk appetite. Consider consulting a financial advisor who can help you make informed investment decisions based on your specific requirements.

      It’s important to note that the process may vary depending on the bank and the country you are residing in. Therefore, it is recommended to directly contact your bank for specific instructions tailored to your situation.

  • I was an nri for the last 30 yearsI came back to india during jan 2022 and declared as a resident in october 2022 , Is tds is applicable to me for first and second quarter of the last financial year 2022-2023

  • When my status changes from NRE to NRO is my interest on NRE FD will be taxable from the day my status changed or there is a grace period of 2 years?

    • Hi Satish

      The mutual fund units can be held when the resident status changes. Process – Write a letter to individual AMCs with folio no stating your change of Status from NRI to Resident individual and attach the canceled cheques of your old NRE/NRO and the new resident account.

  • Can you please advise on Sukanya Samriddhi account to for resident Indian become NRI and already made deposit for 7 years. How the maturity amount be calculated once status changed to NRI?

    • Hi Ashish,

      You must close your account and withdraw the money as you cannot contine contributing to that account.

    • Hi Sangita,

      It is advisable to check with the individual’s bank regarding their policies and procedures for converting NRI accounts to resident accounts.
      According to my knowledge it usually takes 7-10 days to convert NRI to resident account.

    • Hi Nisvar,

      The date of change of NRI (Non-Resident Indian) status depends on various factors such as the individual’s travel history, period of stay outside India, and the purpose of stay. Therefore, the exact date of change of NRI status varies depending on the individual’s specific circumstances.

  • My pancard is nri now in bhopal i cannot go there to change my pancard i need to transfer my pancard to hospet ito office plz kindly help me

    • Hi Harjinder,
      You will need to convert your NRI demat account to a resident demat account. This can be done by submitting a written application to your depository participant (DP) along with the required documents.

  • I was having NRI/NRO A/Cs for long time now I have returned to india before 3 months after retirement from Saudi Arabia,Hiw can I change my NRE a/c to resident savings a/c?

    • Hii Abhi
      You can open the account through eNPS ifyou have an Aadhaar or PAN card. It can be done from the eNPS website.
      You can download the NRI NPS form, complete it and submit it to the bank branch.
      The amount will have to be remitted through the NRE/NRO account.

    • Hi Abhishek,
      You need to do the following things:
      1. Changing bank accounts.
      2. Opening a Savings Account in India.
      3. liquidating your foreign assets.
      4. Change in taxation.
      5. sign up for a good health and life insurance policy for yourself and your family as the insurance policy, you bought in a foreign country, will not cover you in India.

    • Hi Radhey,
      An NRI family can not hold a resident savings account when they become NRI. They will need to convert that account into NRO and NRE Account.

  • I am an Indian Resident – My daughter who is US Citizen wants to apply for my GREEN CARD – I want to know if My Status changes from Indian Resident to Green Card holder – what will be the tax implication on my Earnings in India – which is mainly the income from FD/Bonds interest & MF & Shares buy and sale

  • My daughter is an NRI, living in States. She wants buy a property where we can live. Is it right thing to give her employement/income related documents and buy or we can locally apply for loan and she continues to send us money into her NRE a/c to pay up EMIs?

  • I have been in USA for couple of years with one year gap(in india). I have never reported my foreign account/money/saving to IRS while filing tax returns as i didnt have that much knowledge at the time so i missed . Now i am in need to bring my own money from INDIAN saving accounts to USA bank account. can you please let me know what should i do/follow so that i can bring the money legally into US account ?

    Can i report my foreign account first as part of this year tax return and then bring them thourhg remittance process in indian bank website ?

    or i can bring the money and then report t IRS as part of tax filing – it will be more than $10K?

    Would USA bank have any concern ?

    • Hi, Pankaj Sharma
      First, You should have to convert your resident savings account into NRE Account, then you can transfer amount from NRE account to US Account.

      • Resident savings account can never be converted to a NRE account. It can be converted only to NRO account.

  • 01) Maximum how many years 1 can enjoy RNOR status ? 02) i m working in middle east for 27 years n visited india every year for 25 days vacation. i plan to return permanently on august 21, 2022 . will i get RNOR status for FY 22-23, 23-24 N 24-25 ? 03) If i return to india on Oct. 10, 2022, will i be treated as NRI for FY 22-23 n subsequent 3 FY as RNOR ? pls. answer above 3 queries specifically. i will appreciate answer to each query in yes or no and with explanation if any. Dhanyawaad.

    • Hi Damodar

      1. A person can enjoy 2 years of RNOR status.

      2. RNOR status for FY 2024-2025 would be doubtfull as you will stay more than 6 months in FY 2022 & 2023.

      3. Yes, if you come in Oct 2022 then you will be NRI for that particular year but for next 2 years you can enjoy the RNOR status and from 3rd year it will be resident.

  • Hi I have not not coverted my resident bank and demat account to NRO and kept on investing in indian stock market from resident demat for last 1.5 year after becoming NRI..Now what shall I do shall i sell all stocks and book profits and close the account or what can be done legally..please advice.

    • Hii Mr. Arnab
      As per my knowledge it is illegal for an NRI to have a resident saving account so firstly you must change your bank status to NRI and also NRI must open Portfolio Investment Scheme for investing in direct equities.

    • Hii Rajib Seth
      As per my knowledge you may continue to hold the Credit card provided you have the NRE or NRO account.
      It is advisable to contact your respective bank.

    • Hii Sonal
      As per my knowledge to change the residential status from NRI to resident in India first you need to inform the bank and process your KYC with identity proof

    • Hi Jay

      NRI can invest in certain GOI Bonds via Fully Accessible Route. You need to approach where you had bought the Bonds can inform them about your current status and they will guide you on changing the details in the bond.

  • How to change pan card status from NRI to the resident? Because I am intent to open a Demat account and when to sign up it’s showing status in NRI.

    • Hi Chakkammattil,
      For changing the status in DMAT account contact your broker in which you have DMAT account. For changing status PAN Card try this through PAN-NSDL site.

  • I have opened Mutual funds with my NRO account, not I want to do redemption of those mutual fund money to my NRE account. is it possible? what taxes I should be aware of?

    • Hi Shwetha,
      Consult your CA for better understanding because in this process some forms are required. CA will give you a better insight of the process.

  • IN NRO account the any rental income deposit which is below the tax net, whether the IT will deduct 35%

  • I have an Icici super pension plan since 2008, now I am RI should I change status from NRI to RI. What are the tax implications?

  • When I was an Indian resident I have invested in some mutual funds now I Became an NRI how to change my status

  • Being an NRI, when I fill-up the form for a new NPS account, how does the repatriation status of the account change the way I can move funds to and from my account?

  • I am planning to visit my children in Canada on a visit visa for a longer period & will apply for a super visa my children are PR holder and I am dependent on them What will be my status NRE OR Resident Indian.

  • Hi, I am a temporary worker in Canada, I came before 1 year and my work visa will come to an end this year in August. My question is, do I need to open NRI or NRO account for investing? because I will be going back to India within 6 months from now on.

  • Hi,

    I am planning to move out of India for a few months to a year.

    My questions are

    1) Can I change my accounts to NRE/NRO immediately after receiving my Residency Visa abroad or do I need to wait until I have actually lived abroad for say at least six months?

    2) Also, if I change my status immediately, is any future income earned by me abroad, from that point on, not taxable in India?

    3) On the other hand, if I change my status after 6 months of living abroad, will the income I’ve received before that in that particular financial year, be taxable in India?

    For ease of understanding, let’s assume I’m moving out of the country on 1st of April, 2021.

    Thank you.

    • Hi Wian,
      1.) Yes, you should convert your resident saving account as soon as you become an NRI.
      2.)Yes, it won’t be taxable in India.
      3.) No, it won’t be taxable in India
      Being an NRI income accrued or received outside India will not be taxable in India.

  • I am currently investing in mutual fund and I am planning to go to Canada for my higher studies and how will it affect my current mutual fund investment?

  • Hi, I have investments in india and I am visiting India in March 2021 and planning to intimate all AMC’s about my status changing to NRI. My questions if I want to continue investing in india through NRE/NRO account can I still do that? Also, funds will transferred from Canada to India after I have paid taxes here, do I have to pay taxes on the capital gains that I will be making in India or Canada?
    Does India have dual taxation treaty with Canada?
    I also have invested in ELSS schemes in mutual funds, what options do I have? Do I have to withdraw my investment or can I hols it? I have certain units which are locked in for 3 years as I am still investing via SIP from resident savings account.

  • I have recently become an NRI and have a savings account in India. I have no intention to transfer money to India or vice-versa. But I use my Indian saving account to pay bills generated in India for my parents. Do I still need to open an NRE or NRO account?

  • I was an NRI. I have returned to India for good in September-2020. I am confused as to whether to inform the Banks to convert my NRE/NRO Accounts to Resident Saving Accounts or Resident Foreign Currency Account. I have some NRE FDs as well as maturing later.

    • Hi Ankit,

      There will be no big impact on your investments. Now your all investment will be made through NRO or NRE account.

  • Hi Hemant,

    I am Ram, Staying UK For 3 Years, Last Year I opened Trading Account In India and started trading. Now I will Come to Know that I can’t do that as I am NRI. I Didn’t earn any money, went to loss only. Please Let me know what can I do, is there any penalty ?

  • I was nri and have NRI deposits I have cancelled visa and not returned to India during March 2020. What to do with my nri fd accounts?

  • I came across your this wiseNRI first time I found so much of information so simply explained for the NRI Thank you so much for all the information provided here I found it very helpful indeed. Looking forward to more useful interesting information for the NRI. Thanks again!

  • I am already a NRI for several years now and planning to invest in MF and equity shares from my NRE account. But my KYC status is Resident Kindly guide me on how I can change my KYC status from Resident to NRI status?
    Also my NRE account in India is not PIS activated Please guide me on how to get my PIS activated for my NRE account.
    Thanking you in anticipation…

  • I was NRI in UAE for past 7 yrs and returned to India on 1 Aug 2020. Thus only 4 months out of India. If I can go to UK for 2 months on visit visa, can I retain NRI status for this F/Y?

    • As per my knowledge, Your status will be considered as NRI for this year considering if your total Indian taxable income is less than 15 Lakhs.

  • After working 23 years in the Gulf, i have returned. If I change my NRE account to resident, my NRE FD is taxable even though i am not coming under taxable limit?

    • Hi Sankar,

      As per my Knowledge Yes it is taxable after returning to India, Deduction under Section 80TTB up to ₹50,000 may be claimed on the interest income from FDs only if an individual qualifies as a resident senior citizen (60 years or more) in India.

  • I registered few companies in India and my residency status has changed from Indian Resident to NRI what do I need to do and how will it effect me?

  • I am currently an NRI and would be returning to India in couple of years time. I plan to invest in ETFs here. My question is, once I return to India, can I continue to own these ETFs or I should sell them? Are there restrictions on holding foriegn assets (in this I am referring to only financial assets like ETFs or Bonds) when I return? Do i have to pay tax two times (once in the foriegn country and again in India), when I redeem the investments?

    • Hi Sunil,

      As per my knowledge, you can hold foreign assets while you return to India. However, it is preferable to open an RFC account for the same while you return to India. For taxation purpose, you have to check DTAA Between the countries.

  • Mr. Hemant Beniwal
    Thanks for writing the articles to increase the knowledgeable of NRI’s. Your articles are very informative.

  • I was an NRI. Came to India in Dec 2020 expecting to go back on another job opportunity. Now I am not planning to go back. How can I change the status from NRI?

  • Sir the lack of proper guidance in even simple issues is mind numbing. I was unaware I needed to inform of change of status to bank (NRI to RESIDENT) it has been 3 years since I returned to India, can I inform now after 3 years to change my NRE account to normal resident account..I hope there will be no imprisionment or huge penalty. I want to fix this issue as a law abiding citizens.

    • Hi Varun,
      There is can be some penalty it can be in some sort of monetary terms or they might cease the account, but you won’t have to face imprisonment.

  • I am staying in Israel for work for the last 3 yrs. If I fill the documents, what should I write in my country of residence?

  • I’m already an investor in mutual funds. I want to change my resident account to NRE / NRO account. What will happen to my existing investments and SIPs?

    • hi, Your savings account will get changed to the NRO account. You will have to inform your mutual fund company regarding your change of status, and then you will have to update your KYC as NRI, It won’t affect the funds.

      • Thanks Rohit. Is there any official document ( from RBI) to support this so that I can produce the same to my local bank. Thanks once again. Sorry for the late reply????

  • I have opened trading and Demat account with upstox and buy some shares and once I received the statement it is showing wrong status resident instead non-resident I want to know how I can request to correct my status?

    • your KYC might be as Resident Indian that is why it might be showing so, you can still contact their customer service regarding it.

  • Hi Martes,
    Firstly, you have to inform the bank about your NRI status, and as per my opinion, you can continue the account on “either or survivor” basis. For better confirmation, consult with your bank.

  • My parents made joint savings bank accounts with me while i was a resident and a minor. Now am an NRI. Does this account have to be closed ? I heard an NRI can continue to have a resident bank accont with close relatives, on “either or survivor” basis, but would like some confirmation, thank you.

    • HI Martes,

      You can continue with this account but your mother or father should be the first holder of this account.

  • Hello!
    I have started investing in mutual fund through SIP from Resident Saving Account about few months ago. I am NRI from last 6 years. I have not open NRE or NRO Account because of I haven’t got legal status yet. What should I do? Should keep doing my investment now once I gor legal status Can I change my Account to NRE/NRO and also able to change my KYC through PAYTM Money as NRI. Please let me know I have to find information but i haven’t got anything yet.


  • Hi Nagesh,

    An NRI cannot invest in PPF, however, if one’s residential status subsequently changed to NRI, the account was allowed to be run till maturity

    • Hi Nagesh,

      If you had opened ppf before being an NRI you can hold it till maturity. and for other small saving schemes NRI’s are not allowed to invest.

  • I am currently an nri since 3 years but till now using normal saving account. I have recently invested in MF (75000 INR) and Stock (150000 INR) back from 2 months. What should I do now Can I carry on with normal saving account?

  • I moved to NRI status and I have rental income in Kerala. Can I deposit it to my joint account with my mother or to my NRO account only?

    • Hi Tarun,

      An Indian Citizen who have gone abroad for gainful employment or for carrying on a business or vocation or for any other purpose in circumstances indicating an intention to stay outside india for uncertain duration, can open a NRE account

  • What if I have more than 1 savings account in India and I have opened a separate NRE/NRO account also then I have to convert my existing savings account into NRE/NRO?

  • One is allowed to repatriet the income earned from a NRO account. What about the initial amount at the time of conversion that was in the resident account? Can that also be repatriated? Thanks

    • Hi Surya,

      Yes, it will be taxable but if you can maintain RNOR Status – you can avoid tax. I will soon write a post on this.
      Surprisingly few banks even don’t allow you to continue NRE FDs after the status change – a technical issue on their side.

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