OCIs and NRIs should Take Guard of these Financial Matters (before relocating to India for long)
As the global lockdown is gearing up to open for the travel industry & international air spaces amidst the global havoc caused by Covid-19, there might be a teeming number of Persons of Indian-origin (PIOs), Overseas Citizens of India (OCIs), Non-Resident Indians (NRIs) and Expats staying outside India, who may be looking at this opportunity early-on to return to their homeland: India, forever. This could be on account of unfortunate events of losing their jobs, businesses, or other reasons caused since Jan ‘2020, as an after-effect or economic turmoil caused by the corona scare, worldwide.
We spoke to a few of our existing clients residing overseas who are working to move back (singly or as a family) and wanted to know all likely financial aspects to watch out for and settle. It is imperative to make their exit smooth and possibly avoid any legal disputes arising on their names when they’re gone from their current country or upon their arrival in India! With this, for the benefit of the larger Indian-origin community across the globe, we decided to write this for every affected person’s act accordingly.
Please share this with all the Indian-origin community in your circle to help them with awareness on “What all to Settle” before they left their overseas home countries. You never know if they also are sadly affected and be packing at this time to move to India, immediately as the global skies open for them to travel.
Prepare: ‘Transaction List’ (Current Country)
Breathe out and gather enough courage and patience to list out all financial matters to settle in your current country of stay (not India), besides any of your personal agendas that need to be reconciled as well. The financial transactions list may include:
- Processing of all digital/ physical paperwork from your existing employer (if any) including appointment and relieving letters, salary certificates, full & final settlement notes, etc.
- Closure and withdrawal of local bank accounts and withdrawal of money.
- Settlement of outstanding mortgage payments on housing loans, or settling the rent or advances of your currently occupied dwelling.
- Clearance of outstanding dues related to credit cards, personal or business loans, etc.
- De-registering yourself from the local ‘Tax Office’ to avoid penalties and claim tax refunds (if any).
- Cancellation of contracts related to Telephones/ Mobile connections, gas & electricity bills, vehicle parking dues, internet, TV & related paid subscriptions & licenses, domestic travel bills or outstanding, Fitness center subscriptions, etc.
- Terminating contracts related to any other offline or online platform subscriptions including ones to transact Equity/ Stocks/ Derivatives, etc., Life, Disability & Critical Illness insurances, Health Insurances, etc.
- Forfeiture, cancellation & returning of government-specific IDs and their closure as applicable to your case, not limited to: Individual IDs (like Social Security Number, etc.) Driving licenses, etc.
- Processing to cash-out or transfer your pensions to India (eg: HRMS-UK pension funds could be moved to India through the process of QROPS with the help of a chosen financial advisory from India)
- Disposing-off your car, other vehicles, or any of your existing belongings that need to be squared-off.
- School passing/ migration certificates for your children’s admission (if any).
- And most importantly, consult a trusted financial advisory in India to discuss the next steps to your financial success in India.
Words of Caution:
- You cannot afford to omit listing any financial liability in this list, as not terminating or settling that may adversely trigger legal threats against you in your current country or in India as well.
- If you have pets/ animals, you may look at donating them to locally available non-profit societies. If you wish to bring them to India along with, you must book order through an export agency or speak to the airline cargo to arrange for its delivery to India and pay the cost accordingly.
- Move all accounts where you receive physical mail or posts, carrying your printed personal information, to the online mode. This is to discontinue physical mails and start receiving soft copies against those papers that maybe bills, promotional letters, etc. This serves the purpose of avoiding the illegal use of your credentials by anyone receiving those physical mails in your absence.
- If you wish to move any of your belongings to India, you must also contact a shipping & packaging or courier/ logistics company that could help pack your stuff and eventually ship it to India. You must do your bookings ahead of time to avoid a last-minute rush. Note: Make sure you get all your cargo boxes labeled with at least 2 emergency contact numbers on them. In case they are lost in transit, they could possibly be traced and returned to you.
- Lay special stress on closing your credit card outstanding as the credit card companies can charge you several thousand extras, year on year, only because of their high-interest rates. If you do not pay heed to close the credit card’s outstanding dues, even after returning to India, the respective credit card companies or banks, in an attempt to recover dues, may hunt you across the length and breadth of India (through their commissioned recovery agents) and be troublesome to your safe and pleasant stay in India. Furthermore, you may be blacklisted by the respective credit organizations/ banks and your entry to the local ports/ airports of your current home country also may be barred. All of this is generally reflected in a country’s airport immigration systems as well. So, take steps to amicably settle this financial matter, even if it is financially challenging.
- In the context of your property mortgage, you can expect to negotiate with your lending bank to square off your loan, explaining your current financial condition and by negotiating with them to possibly acquire the property and pay you some amount instead (if the loan outstanding is quite high). If this case does not work, employ a professional property broking company (into sale and purchase) to sell your property on your behalf and settle the bank’s outstanding and dissipate the property matter. Make provision for the property broking company to transfer your balance amount to your NRE account.
Note: You can always add to this list as desired.
Prepare: ‘Transaction List’ (INDIA)
Take a sigh of relief as you go on to knocking-off items, one by one, on the list above. Here, it is equally important for you to prepare this transactional list to be successful in India, actually, even before you touch the Indian surface. You could start executing the first few steps sitting wherever you are currently, outside India. You are strongly advised to work with a ‘Financial Consulting’ company based out of India that works across geographies, to action this chronological list:
- Updating popular Indian job sites or manpower consultants with your details and post your most recent & fitting CV/ Resume.
- Booking flight tickets & travel insurance (covering corona) to India or knowing the revised procedures/ guidelines to get that done, as well as, quarantine guidelines on landing in India.
- Planning your Term Life Insurances before your travel with the help of a licensed Financial Advisor from India.
- Filing application for medical or Health Insurances for yourself & family (before the travel) with adequate cover through a Licensed Financial Advisor’s help in India.
- Readying your rental or permanent accommodation in India. In case, you don’t have a permanent residence in India, the advice instead is to move to a pre-booked guesthouse/ hotel accommodation as you land in India and take a week or two to see, select and finalize your permanent-stay house location in India.
- With children traveling along, writing to possible schools around the expected location, in the Indian city where you plan to reside and seek admission guidelines/ paperwork needed for children’s prompt admissions on landing.
- Activating your NRE/ NRO bank accounts online (if non-functional) or open new ones.
- Applying for a local SIM card (mobile) as soon as you land back.
- Applying PAN Card (Permanent Account Number) if not already available in India and understand the new tax liabilities from your Financial Advisor.
- Filing for your Indian taxes, in case you already had an Indian PAN card, for the previous financial year. Do this even if you had to file zero taxation, as this will help you secure a credit card or a quick personal loan, in case of a need or emergency.
- Closing any of the active international credit cards that you have carried along from your home country to India, by paying all dues & balance.
- Most importantly, when it comes to investing money, working with your Financial Advisor to create an investment pool that immediately starts income to take care of your daily needs. This could be planned with the funds that you carried back to India after the wrap-up.
Words of caution:
- Keep a loaded travel kit that includes: First aids, masks/ gloves, hand sanitizers, clothes, etc.
- You cannot afford to miss any paperwork back in your home country, as once in India, it would be very difficult for you to communicate long-distance with external parties.
- Before flying off from your current home country, be sure to have some cash handy, along with an active credit card or more.
- Banking accounts (NRE/ NRO) need to be activated and made online functional so that you are able to transact and pay money for any transaction done from your current country of stay or India.
- If you have children traveling along to settle in India, engage them in getting contacts/ emails of their best buddies to stay in touch with, even if they are gone. This would help boost their spirits in India and shouldn’t make them feel suffocated with the large change.
- Not closing as well as not paying dues of your international credit card may attract heavy penalties. Also, all global financial systems are nearly connected, unlike a few years ago, so escaping the liability is not an option.
- You can even go on to applying for jobs directly with employers and top corporate of India, on their respective sites. Conduct a comprehensive search of best companies & employers in the city where you are landing.
- Term Life Insurances would only be available to be taken from India whilst sitting in your home country, only if your country (outside India) is in the current list of approved ‘eligible’ countries, as per specific life insurers in India. This is amidst revised guidelines, currently prevalent for coronavirus conditions, which limits Indian-origin sitting in certain countries currently, to avail a life cover in India.
- Your eligibility for medical or Health Insurance cover, whether to be purchased sitting in your home country or on landing back to India could be discussed with your Financial Advisor from India. With him, discuss in detail any existing medical ailments or allergies and medicines that you may be consuming currently. On touching the Indian base, you may have to follow the Indian government’s quarantine guidelines. So, ready your own supplies/ things of relevance envisaging the quarantine period.
- Directly booking and paying for a finalized rental accommodation of stay in India, at a distance, is risky from the angle that you do not know whether that accommodation would fit your exact requirements or not. Hence, your money could get stuck. If you are thinking of purchasing accommodation immediately as you return, you are advised to defer your plan on it. The properties/ real estate market in India is pretty stressed right now and has skewed prices. Also, at this time it will be pertinent for you not to spend a larger sum of money from your reserves to invest in property. This could be reconsidered post you have settled comfortably, say in about 1 year.
- Opening or maintaining of bank account (NRE), which is a Non-Resident External account would give you the flexibility to bring back any payout of your bank, property sale, full and final settlement amounts of your past employer, etc. to the NRE account. All interest contained in the NRE stays exempted from Income Tax and Wealth Tax, as well as, is free from any Inheritance Tax liability. To avoid Indian taxation issues, the same NRE has to be converted to a normal account within a stipulated timeframe if you are now deciding to stay in India or you get the option to change the account to a Resident Foreign Currency (RFC) account to keep receiving foreign funds. Discuss with your banker in detail on the same explaining your specific situation.
Note: You can always add to this list as desired.
The crux of the article is that you should work on populating 2 comprehensive lists of transactions, one to be made for your current home country and the second one for the India-specific transactions. You should consult a qualified Financial Advisor to discuss these matters and get a smooth execution, avoiding stress.
Indian-origin people definitely have the flexibility to consult BigRise Financial ™, an Investment & Insurance consulting organization that works in the space of working with Indian-origin across the world including: PIO, OCI, NRI & Expats to get them cutting-edge investment options in India which are into world-class financial organization products and solutions.
To get COMPLIMENTARY advice on this situation, write into: nitin@bigrisefinance.com
Or Drop a WhatsApp on:
+91 98182 46300
Author: Nitin Attri
BigRise Financial ™
Major Contributor: Koteeswaran Paulpandian (Engineer), UK
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