Watch: 5 NRI Return Mistakes to Check Before Moving Back
Roundup of common return-to-India planning gaps, with links to detailed owner guides for RNOR, accounts, DTAA, Social Security, phone access, and budgeting.
The full write-up, with the numbers and the links.
Chapters
- 0:00 Introduction
- 1:13 NRI Status
- 2:32 Closed Foreign Accounts
- 4:07 Extra Tax withholding
- 5:12 Social Security
- 6:27 Budget
- 7:33 Recap
Transcript
Auto-generated captions, lightly cleaned
0:03 If you are planning to move back to India or even just thinking about it, this video is for you because the truth is returning home without a proper prep could cost you lacks. I have seen with people who moved back with best intentions but missed few key steps and it hurt them financially. So in this video let me walk you through five common but avoidable NRI money mistakes and you could save big by avoiding them. By the way, we have also created a free downloadable financial road map that can help you with your return and the link to this is available in the description below. Along with that, we have the details of the course that dives even deeper into all of this.
1:03 For those who are new to this channel, my name is Avin and I moved to India after living in US for 20 years. Let's dive into today's topic.
1:18 First up, the RN status. If you're not familiar with this term yet, pay attention because literally it can save you from paying tax on your foreign income, which could include capital gains, interest income, and much more. R N stands for resident but not ordinary resident. For up to 3 years after your move back to India, you can enjoy NRI like tax benefits even though technically you are a resident of India. Some of the RNR benefits you have capital gains from your US stocks. This could be completely tax-free in India during RNR.
2:07 Foreign rental income is tax-free again in RNR. So any of these foreign incomes, you don't have to pay taxes during RN. If possible, time your move to optimize your non-resident and RN phase so that you can plan your finances better.
Read the full transcript (9 more sections)
2:37 Many NRIs close their foreign accounts too early only to realize that there is no way for them to deposit refund checks, pay taxes, or manage their investments. Consolidate and keep your bank accounts, investment accounts as well as credit cards open. Please note there are some institutions like Robin Hood, Weeble that don't allow non US resident account holders. Even if you're a US citizen living abroad, that account is not allowed with these institutions. So please be mindful and have account with institutions that allow non US resident account holders.
3:28 Also, don't forget to keep your foreign phone number active to get your OTPs. Use services like Google Voice, T in US, Fongo in Canada, Labra in UK for lowcost options to keep your phone number active. Also update your mailing address to a trusted friend or a digital mailbox or your international mailing address. Trust me, you don't want your accounts to be locked out when you are 8,000 miles away.
4:12 Here is a sneaky one that can eat into your returns. the extra tax withholding on foreign income. Let's say you have dividends on your US stocks. If you don't do anything, the custodian withhold 30% of that income as tax withholding. But India has DTAA, double tax avoidance agreement with many countries and you just need to file the right forms. W8BN in US form 10F and tax residency certificate TRC in India. By filing these forms, you can flash your tax withholding as low as 0% and let you claim credit while filing the taxes in India. I know it's a boring admin, but it's worth it because you are really saving money here.
5:16 Okay, listen to this carefully. I have seen few people really regret this. If you have worked in US and have 40 social security grades, that's about 10 years of work in US, you are eligible for social security retirement benefits even after moving back to India or you are retired in India. If you have moved to India after eight or nine years of working in US and didn't hit that 40 credit mark, you could lose everything that you have contributed to the social security system. So if you're close to that 40 credits, let's say you are in 36 or 38, think about staying for one more year so that you could be eligible for your social security retirement benefits and have these monthly payments hitting into your bank accounts lifelong.
6:18 The same goes with the Canada pension plan and with UK. So plan this out. It could be worth lacks over time.
6:32 Now let's talk something that seems simple but can cause major friction after the moon. It's budgeting. We all assume India is cheaper and yes it can be but not always if you are used to certain lifestyle. Here is what surprises most returnees. International schools can cost you 3 to seven lakhs per child annually. Rents in places like Bangalore, Hyderabbad, Mumbai, they're quite expensive. Private hospitals, diagnostics is another one. Frequent travel to visit family or in-laws if they are from other states. So before moving to India, prepare a detailed monthly and annual budget.
7:20 Compare costs in tier 1 and tier 2 cities. We have created a free downloadable financial road map to help you with this and the link for that is available in the description below.
7:38 All right, let's recap. R no, understand it and optimize it. Second, keep your foreign bank accounts and foreign numbers active. Third, file DTAA forms. Minimize tax withholdings and avoid double taxation. Four, don't miss out on social security or pensions. Five, budget realistically. India has surprises too. Each of these steps can save you lacks, protect your wealth, and help you return with confidence. If you found this helpful, hit that like button so more NRIs like you find it. Don't forget to subscribe to the channel. Want to go deeper? Download our free finance road map link below or sign up for our NRI finance planning course which can
8:38 Walk you through step by step all the things that you need to plan when you're moving back to India. This channel is all about sharing real stories, practical guidance and building a helpful community. So if you have moved back or planning to move back, comment below, share your questions or just say hi.
