The Return Isn’t Just About Family—It’s About Rebuilding Finances from Scratch

Image Source: The Economic Times

As more NonResident Indians (NRIs) consider returning home—whether for family, career, or retirement—the financial transition is proving more complex than emotional goodbyes. From tax status shifts to asset repatriation, the journey demands careful planning.

Key Highlights

NRIs returning in FY 2025–26 must track their days in India to determine tax residency
Those spending over 182 days may qualify as residents, but transitional RNOR status offers temporary tax relief
RNORs are taxed only on Indian income and foreign income received in India, typically for 2–3 years

Income Tax Planning

Preserve NRE and FCNR accounts; interest remains taxfree during RNOR phase
Disclose foreign assets once classified as ROR to avoid penalties under the Black Money Act
Use DTAA benefits to avoid double taxation on pensions, dividends, and overseas income
Choose between old and new tax regimes based on deductions and income structure

Asset Repatriation and Job Shifts

Plan withdrawals from foreign retirement accounts carefully; staggered repatriation may reduce tax impact
Update KYC with banks and mutual funds to reflect new residency status
Consider RFC accounts to hold foreign currency legally in India
If switching jobs, align salary structure with Indian tax norms and review ESOP/RSU vesting timelines

Lifestyle and Financial Adjustments

Expect lower salaries but higher inflation; build a contingency fund for 12–18 months
Reassess insurance, housing, and education plans for children
Emotional readiness and adaptive mindset are key to settling in smoothly

Sources: Economic Times, MSN India, Business Standard, TaxGuru, VisaVerge, Manikarthik.com